Contractors are the ultimate consumers of materials and supplies used to perform real property contracts and must pay tax on the costs of those materials and supplies unless the contractor has entered into a retail sale plus installation contract. The contractor must furnish a resale certificate to their supplier when making purchases for materials that are itemized and resold. Use of Materials Tax is due on the use of goods by the contractor. If sales tax was not paid at the time of purchase, the contractor becomes responsible for the tax. Contractors may manufacture or fabricate a finished product from raw materials for use in a contract.
Contractors owe tax on the manufactured cost of such products.
For example, a cabinet maker is required to pay tax on the manufactured cost of the cabinet. The tax is computed based on the tax rate in the county in which it was manufactured or fabricated. If a product is fabricated at the job site, fabrication labor is exempt from tax and only the cost of the materials is subject to tax. Seminars Offered Department of Revenue service centers host educational seminars about how Florida's taxes affect various businesses. For a schedule of upcoming seminars, check online , or call the service center nearest you for a schedule of upcoming seminars.