Decide who pays the sales tax on your Florida job before the first delivery lands

A commercial kitchen fit-out in Palm Beach County. Two hundred and fifteen thousand dollars, of which $120,000 is equipment and materials and $95,000 is your own labor. You broke the materials out on the invoice, the way a tidy contractor does, and you also handed over 6 percent at the supply house counter because that is what the supply house charged you. That is $7,200 of sales tax living inside a job you priced at a 9 percent margin. Nine percent of $215,000 is $19,350, so the tax you paid at the counter took better than a third of the profit on the job, and the customer paid none of it.

Florida did not have to work out that way. Rule 12A-1.051, Florida Administrative Code, sorts construction contracts into two roles, and the role decides who carries the tax. On one side of the fork you are the ultimate consumer: you pay tax on materials when you buy them and charge the customer nothing. On the other side you are a retailer: you buy the materials exempt against your Annual Resale Certificate and collect the tax from the customer. The rule that draws that line has not been amended since April 17, 2003, so the version you are reading about is the version the auditor is reading.

By the end of this page you will have this job sorted into one of those two roles, a contract clause that itemizes and prices your materials before work begins so the retailer classification holds up, the delivery county's discretionary sales surtax applied with the $5,000 single-item cap on it, a five-factor checklist you can put in front of a school board before you price their job tax-free, and the DR-15 filing band that section 212.11 actually puts you in rather than the one the internet keeps repeating.

Written against the 2025 Florida Statutes and the CY2026 surtax rate table. If you have worked in Canada, put the reflex down: HST is one rate on the whole invoice and the contract type has nothing to say about it. Florida's answer moves with the paperwork you signed.

Sort the contract into one of the two roles before you buy anything

Rule 12A-1.051 does not ask what trade you are or how big the job is. It asks what kind of contract you signed, and it has a list.

Read the first six rows together, because they are the ones that surprise people. Time and materials sounds like the most itemized arrangement in construction, and Florida still treats you as the ultimate consumer of the materials on it. Cost plus does too. Handing the customer a breakdown of what you paid does not make you a retailer of anything.

That is the trap the opening job fell into. The invoice was itemized. The contract was not. On a real-property contract the tax attaches when you buy the material, and tidy billing afterwards does not move it onto the customer. The useful half is the bottom of the table: two of those rows put the tax where the customer pays it, and one of them is a contract you can write on purpose.

Itemize and price the materials in the contract, before work begins

Here is the whole test for a retail sale plus installation contract: all the materials to be incorporated into the work must be itemized and priced in the contract before work begins. Fail it and the contract reverts to real-property treatment, which puts you back on the ultimate consumer side holding the tax on the materials yourself.

Before means before. Not on the first draw, not on the closeout invoice, not in a change order in month three. The document that carries the itemized, priced material schedule is the one you both signed at the start.

Take the same $215,000 fit-out and run it twice.

Seven thousand two hundred dollars, decided by which document the material schedule was attached to. That is the highest-paid twenty minutes of admin available to a Florida contractor, and it is available on the next job you quote rather than the one you are arguing about.

Two habits keep it clean. Price the material lines in the contract at or above what you expect to pay, because the tax you collect is measured on the contract price. And keep resale stock separate from shop stock, because material bought exempt and then consumed on a lump sum job or in your own building still owes the tax.

<!-- Capture belongs here later: the quote screen with the contract type set to retail sale plus installation and the itemization question answered yes, showing the tax line appear on the materials rows only. Florida tenant, Florida county. -->

Charge the surtax of the county you deliver into, and stop it at the first $5,000 of an item

The 6 percent state rate is the easy part. On top of it, most Florida counties impose a discretionary sales surtax, and three details about it decide whether your number is right.

It is sourced to the delivery county. Not your office, not the customer's billing address. The county the material is delivered into, which on a construction job is the jobsite. Deliver into a county with no surtax and there is no surtax.

It stops at $5,000. The surtax applies to the first $5,000 of the sales amount on any single item of tangible personal property. A $42,000 rooftop chiller delivered into Palm Beach County at 0.5 percent carries $25 of surtax, not $210. The same unit delivered into Hamilton County at 2 percent carries $100, not $840.

The cap does not reach services. Charges for services, admissions, transient rentals and prepaid calling arrangements sit outside the $5,000 limit.

The CY2026 rates the state published on Form DR-15DSS include some numbers worth knowing by name:

Your own county's rate is the one number on this page that has to come from you, and two things circulate wrongly about it. The first is the range: the Department of Revenue's general surtax page describes county rates as running 0.5 percent to 1.5 percent, while the CY2026 rate table itself puts Hamilton at 2.0 percent. The table is the authority and the general page text is stale against it. The second is the file. The unsuffixed DR-15DSS at the state's current-forms address still serves the prior calendar year; the CY2026 table lives at the year-suffixed filename, dr15dss_26.pdf. Bookmark the unsuffixed link and you are quietly bidding with last year's rates each January.

Get all five public-works factors in writing before you price a school job tax-free

Government work carries a reflex that costs real money: the customer is exempt, so the job is exempt. Rule 12A-1.094 says the exemption belongs to sales made directly to the governmental entity, and a contractor who buys materials and incorporates them into public works is the ultimate consumer of those materials.

The entity can be the purchaser instead. All five of these have to hold at once.

The instrument that makes it real is the Certificate of Entitlement, issued by the entity for each vendor with the purchase order attached and all five factors initialed. Once it is signed, the entity assumes liability for tax, penalty and interest if the exemption turns out to fail. That is the single strongest piece of paper on a public job, and it is issued by your customer, so asking for it early is the whole move.

Price what is riding on it. On a $2.4 million school addition carrying $900,000 of materials, the state tax alone is 6 percent of $900,000, which is $54,000, plus the county's surtax on top. Bid it assuming direct purchase, then find at closeout that the district's PO ran through you and the district carried no risk of loss until acceptance, and $54,000 lands on a job bid at single-digit margins.

F5 is the one that fails most often, and it fails quietly, because risk of loss is buried in a term of the district's own purchase order rather than announced. Read that clause before the bid goes in, not after the delivery truck arrives.

Register once on the DR-1, then file on the band s.212.11 puts you in

If you write a retail sale plus installation contract or sell over the counter with installation, you are a dealer and you register. Form DR-1, the Florida Business Tax Application, covers sales and use tax and reemployment tax in one filing, and it returns two documents: the Certificate of Registration, and the Annual Resale Certificate that is the actual instrument you hand a supplier to buy exempt.

A contractor working purely real-property contracts is the consumer at the counter and may not need dealer registration at all. The registration follows the kind of contract you write, so it is a decision that belongs upstream of the paperwork rather than downstream of it.

Filing frequency is assigned when you register, on bands set by s.212.11:

There is one more option in the statute and it is the source of a widespread misreading. Above $1,000 and up to $12,000, you may file a quarterly return while making monthly payments. That $12,000 figure is the ceiling on an option. Secondary guides published through 2026 repeat it as the threshold that puts you on monthly filing, which is wrong by a factor of twelve: monthly filing starts above $1,000. If a bookkeeper has told you that you are under the monthly rule because you are below $12,000, that is the sentence to go back and check.

Returns and payments are due on the 1st and late after the 20th of the month following each reporting period, and electronic payers have to initiate by 5 p.m. Eastern on the business day before the 20th. File and pay electronically on time and Florida gives some of it back: a collection allowance of 2.5 percent of the first $1,200 of tax due, capped at $30 per reporting location. Small money, and it is money for doing the thing on the day you were doing it anyway.

What it costs

There is no monthly subscription. The platform fee is 2.5% of each invoice processed through AEC Stack, collected on payment due dates.

The government's side of the same job is a separate set of numbers, and they belong in the bid rather than in a surprise:

Put the classification on the quote, where it can still change the answer

The reason this subject costs money is timing. The decision is made at contract signature and discovered at invoice, and by then the only available move is to eat it.

AEC Stack moves the decision forward. On a Florida quote or invoice, the tax panel asks which of the 12A-1.051 contract types this is, in the rule's own words, and computes from your answer: the ultimate consumer path returns no tax line and says so on the document, and the retailer path taxes the material, fixture and equipment lines. Pick retail sale plus installation and it asks the question the rule turns on, whether the incorporated materials were itemized and priced in the contract before work began. Answer no and it reverts the contract to real-property treatment in front of you, in writing, while the quote is still a draft you can change.

Mark the job as public works and the five factors come up one at a time as F1 through F5. Fail one and it names that factor and tells you the entity is therefore not the purchaser, so the job has to be priced with tax on the materials. Leave one unanswered and it declines to compute rather than handing you an exemption you have not earned. Pass all five and it records that the Certificate of Entitlement with the purchase order attached is the document that moves the liability.

Then it asks which county the job is delivered into, applies that county's surtax, holds the surtax base to the first $5,000 of each item and shows the arithmetic when the cap bites. Where a county's 2026 rate is not yet in the published table it says the rate is missing and marks the total incomplete, which is the difference between a number you can bid on and a number you find out about in an audit.

Open a quote, set the contract type to retail sale plus installation, and answer the itemization question honestly for the job you are bidding this week. If the answer is no, you have found the tax on your whole material bill sitting in the wrong column while there is still time to move it. The rest of the Florida setup, the entity, the registrations and the license that sits behind all of it, runs from starting a contracting business in Florida and getting your Florida contractor license.