Florida guide for HVAC, plumbing and electrical contractors

Sales tax and bookkeeping for HVAC, plumbing and electrical contractors in Florida

In Florida labor is not taxed on work that becomes part of the building, such as central air, water heaters or wiring. Installing or repairing a window unit or free-standing appliance is taxed, labor included.

In Florida the question is not residential or commercial, as it is in Texas. It is whether the thing you installed or repaired became part of the building. A central air conditioner, a furnace, a water heater or new wiring is an improvement to real property: you pay sales tax on the materials when you buy them and charge the customer nothing, labor included. A window unit, a free-standing appliance or a portable generator is tangible personal property: you buy the parts tax free for resale and charge the customer tax on the whole bill, labor included. Underneath that sits the contract type, which decides who pays tax on the materials of a real property job. Here is how the Department of Revenue draws the lines, and what to set up in the books.

Checked against Florida’s own sources on October 25, 2026. By the Books and Trucks team. Not tax advice.

Florida at a glance
Labor	Not taxed on real property work: a central air unit, furnace, water heater or wiring that becomes part of the building. Taxed, parts and labor, when you install or repair tangible personal property such as a window air conditioner or a free-standing appliance.
Materials	Lump sum, cost plus, fixed fee, guaranteed price or time-and-materials job: you pay tax at the supply house and charge the customer nothing. Retail sale plus installation contract that lists and prices every material in advance: buy on your Annual Resale Certificate and charge the customer tax on the materials.
Filing	Monthly if you collect more than $1,000 of tax a year, quarterly at $501 to $1,000, semiannual at $101 to $500, annual at $100 or less. Due on the 1st, late after the 20th. Electronic filing is required once you paid $5,000 or more in a state fiscal year.
Rate	6% state, plus a county surtax of 0.5% to 2% in most counties.
Licence	Certified statewide or registered locally under Chapter 489 of the Florida Statutes, renewed every two years with continuing education.
Income tax	None. Reemployment tax is the one state payroll tax.

Sales tax on labor

Real property or tangible personal property: the item decides the tax

The Department of Revenue sorts every trades job by what was installed or repaired. Real property is the land, its improvements and fixtures; a fixture is an item permanently attached to the building that keeps its own identity after installation. Improvements to real property are not subject to sales tax. Tangible personal property is anything you can see, weigh or touch that is not permanently attached, and installing or repairing it is taxable, parts and labor.

Fixtures the Department names include central air-conditioning units, furnaces, kitchen and bathroom sinks, wired lighting, built-in cabinets, elevators and escalators. When installing fixtures the contractor pays sales tax when buying the materials and does not charge the customer tax on materials or labor.
Source: Florida Department of Revenue, GT-800067, Sales and Use Tax on Construction, Improvements, Installations and Repairs (R. 09/14)
The real property examples include the electrical system and roofing. Generally, items permanently installed into a structure that cannot be removed without destroying them are real property and not subject to sales tax.
Source: Florida Department of Revenue, GT-800067, Sales and Use Tax on Construction, Improvements, Installations and Repairs (R. 09/14)
Hard-wired or permanently installed residential appliances become real property: pay tax when buying the appliance, charge the customer no tax on the appliance or the labor. Free-standing residential appliances are tangible personal property: charge the customer tax on the appliance and the labor.
Source: Florida Department of Revenue, GT-800067, Sales and Use Tax on Construction, Improvements, Installations and Repairs (R. 09/14)
Commercial appliances such as dishwashers, stoves and refrigerators used in a business are machinery and equipment. The contractor charges the customer tax on the appliance and the labor.
Source: Florida Department of Revenue, GT-800067, Sales and Use Tax on Construction, Improvements, Installations and Repairs (R. 09/14)
Tangible personal property examples include window air-conditioning units, household appliances except built-in ones, portable ice machines and refrigerators, and radio and television antennas. Contractors who provide and install such items are retail dealers: they buy the materials tax exempt for resale and charge sales tax on the full price, including installation.
Source: Florida Department of Revenue, GT-800067, Sales and Use Tax on Construction, Improvements, Installations and Repairs (R. 09/14)
Repairing tangible personal property: buy the repair materials tax exempt for resale and charge the customer tax on labor and materials if parts are used. A labor-only repair is not taxable, but the repairer must keep documentation that no parts were joined to the item. Tax applies even if the parts are provided at no charge.
Source: Florida Department of Revenue, GT-800067, Sales and Use Tax on Construction, Improvements, Installations and Repairs (R. 09/14)
Maintenance or service warranty contracts covering tangible personal property are taxable; those covering property that becomes part of real property are not.
Source: Florida Department of Revenue, GT-800067, Sales and Use Tax on Construction, Improvements, Installations and Repairs (R. 09/14)
Mobile homes: with an RP decal the home is real property and repairs follow the real property rules. With an MH decal, or no decal, repairs to the roof, plumbing and central air-conditioning system are repairs of tangible personal property: buy materials for resale and charge tax on the entire bill, labor included, unless the invoice shows no parts were used.
Source: Florida Department of Revenue, GT-800067, Sales and Use Tax on Construction, Improvements, Installations and Repairs (R. 09/14)

Contract types

Lump sum or retail sale plus installation: the contract decides who pays tax on materials

Under lump sum, cost plus, fixed fee, guaranteed price or time-and-materials real property contracts, the contractor is the final consumer of materials and supplies: must pay sales tax to suppliers on all purchases, including those for the contractor's own use, and should not charge tax to the customer.
Source: Florida Department of Revenue, GT-800067, Sales and Use Tax on Construction, Improvements, Installations and Repairs (R. 09/14)
A retail sale plus installation contract is one where the contractor lists and prices in the contract all materials to be used before the work begins, agrees to sell the listed materials at an agreed or regular retail price, and completes the work for an additional agreed price or based on time used. The customer takes title to the materials as delivered.
Source: Florida Department of Revenue, GT-800067, Sales and Use Tax on Construction, Improvements, Installations and Repairs (R. 09/14)
On a retail sale plus installation contract the contractor buys the materials tax exempt for resale and charges the customer tax on all materials.
Source: Florida Department of Revenue, GT-800067, Sales and Use Tax on Construction, Improvements, Installations and Repairs (R. 09/14)
Contractors who fabricate items for their own contracts owe use tax on the fabricated cost. If the fabrication happens at the job site, the fabrication labor is exempt and only the cost of the materials is taxed.
Source: Florida Department of Revenue, GT-800067, Sales and Use Tax on Construction, Improvements, Installations and Repairs (R. 09/14)
A contractor cannot use a customer's tax-exempt status to buy materials for a construction contract. The exempt entity can buy the materials direct, with its own purchase order, exemption certificate and payment, and take title at the job site. Government entities issue a Certificate of Entitlement for public works materials.
Source: Florida Department of Revenue, GT-800067, Sales and Use Tax on Construction, Improvements, Installations and Repairs (R. 09/14)
If materials bought on a resale certificate are later used rather than resold, use tax plus the county surtax is due on them. Materials bought from an out-of-state seller that does not collect Florida tax carry use tax and surtax when they come into Florida.
Source: Florida Department of Revenue, GT-800067, Sales and Use Tax on Construction, Improvements, Installations and Repairs (R. 09/14)
The rule behind the publication is Rule 12A-1.051, Florida Administrative Code, effective April 17, 2003.
Source: Florida Administrative Code Rule 12A-1.051, Sales to or by Contractors Who Repair, Alter, Improve and Construct Real Property

Rates, registration and filing

6% state, a county surtax on top, four filing frequencies, due on the 1st

Florida's general state sales tax rate is 6%. Most counties add a discretionary sales surtax; the rates currently range from 0.5% to 2%, and some counties impose none. The current list is Form DR-15DSS, updated each November.
Source: Florida Department of Revenue, Discretionary Sales Surtax
Which county's surtax applies: for a repair, the county where the repair is done; for a real property improvement, the county where the contractor takes delivery of the materials; for a retail sale plus installation contract, the county where the work takes place; for items fabricated at the shop, the county of the shop.
Source: Florida Department of Revenue, GT-800067, Sales and Use Tax on Construction, Improvements, Installations and Repairs (R. 09/14)
The surtax applies only to the first $5,000 of the sales amount of a single item of tangible personal property. The cap does not apply to services.
Source: Florida Department of Revenue, Discretionary Sales Surtax
Who must register: a business that repairs tangible personal property registers as a dealer to collect sales tax and surtax. A real property contractor should not register unless it owes tax on items it fabricates, but a contractor who also sells tangible personal property at retail must register.
Source: Florida Department of Revenue, GT-800067, Sales and Use Tax on Construction, Improvements, Installations and Repairs (R. 09/14)
Registration is online or on Form DR-1. The Department then issues a Certificate of Registration (DR-11) and a Florida Annual Resale Certificate (DR-13), which expires every December 31.
Source: Florida Department of Revenue, Sales and Use Tax
Filing frequency follows annual collections: monthly above $1,000 of tax a year, quarterly at $501 to $1,000, semiannual at $101 to $500, annual at $100 or less. Most new businesses start quarterly. Returns are due on the 1st and late after the 20th of the month after the period, and a return is required even when no tax is due.
Source: Florida Department of Revenue, Sales and Use Tax
A business that paid $5,000 or more in sales and use tax in the state's prior fiscal year (July 1 to June 30) must file and pay electronically; electronic payments must be initiated by 5 pm Eastern on the business day before the 20th. Timely electronic filers keep a collection allowance of 2.5% of the first $1,200 of tax, up to $30.
Source: Florida Department of Revenue, Sales and Use Tax

Licensing

Certified statewide or registered locally, renewed every two years

Florida licenses HVAC, plumbing and mechanical contractors through the Construction Industry Licensing Board and electrical contractors through the Electrical Contractors' Licensing Board, both under Chapter 489 of the Florida Statutes. A certified contractor can work anywhere in the state; a registered contractor has met one local jurisdiction's competency rules and works there.

No person may engage in the business of contracting in Florida without first being certified or registered in the proper classification.
Source: Florida Statutes 489.115, Certification and registration; renewal (2026)
A certified contractor holds a certificate of competency from the department and may contract in any jurisdiction in the state without meeting that jurisdiction's competency requirements. A registered contractor has registered with the department after meeting the competency requirements of the jurisdiction the registration is issued for.
Source: Florida Statutes 489.105, Definitions (2026)
HVAC classes: a Class A air-conditioning contractor's services are unlimited; a Class B contractor is limited to 25 tons of cooling and 500,000 Btu of heating in any one system; Class C is limited to servicing air-conditioning, heating or refrigeration systems and has been closed to new entrants since October 1, 1988.
Source: Florida Statutes 489.105, Definitions (2026)
A plumbing contractor's services are unlimited in the plumbing trade, from drainage, water supply and venting to septic tanks, irrigation and gas and medical gas lines. A mechanical contractor's services are unlimited for heating, ventilation and similar systems.
Source: Florida Statutes 489.105, Definitions (2026)
Certificates and registrations renew every two years. Each renewal needs at least 14 classroom hours of continuing education, including workers' compensation, business practices and workplace safety, wind mitigation methods for the categories it applies to, and one hour on laws and rules.
Source: Florida Statutes 489.115, Certification and registration; renewal (2026)
Electrical contractors renew every two years with at least 11 classroom hours: at least 7 on technical subjects, 1 each on workers' compensation, workplace safety and business practices, and 2 more on false alarm prevention for contractors who do alarm work.
Source: Florida Statutes 489.517, Electrical contractors: renewal and continuing education (2026)

Payroll and business taxes

No income tax, and one quarterly state payroll tax

Florida's constitution bars the state from taxing the income of natural persons who are residents or citizens, beyond amounts creditable against federal or other states' taxes. There is no state personal income tax to withhold.
Source: Florida Constitution, Article VII, Section 5
Reemployment tax, Florida's unemployment insurance tax, applies once a business has a quarterly payroll of $1,500 or more in a calendar year, or one or more employees for a day in any 20 weeks of a year.
Source: Florida Department of Revenue, Reemployment Tax
Only the first $7,000 of wages paid to each employee in a calendar year is taxable. The initial rate for new employers is 2.7%; employers with a stable record receive reduced rates after a qualifying period.
Source: Florida Department of Revenue, Reemployment Tax
The Employer's Quarterly Report (Form RT-6) is due by the end of the month after each quarter: April 30, July 31, October 31 and January 31. Reports are due even if you had no employees or wages to report.
Source: Florida Department of Revenue, Reemployment Tax

Season and market

Hurricane season sets the calendar

The Atlantic hurricane season runs from June 1 to November 30 and peaks on September 10, with most activity between mid-August and mid-October. For a Florida HVAC, plumbing or electrical shop that is the summer cooling peak and the storm repair peak at once: generators, tie-downs, panel and roof work after a storm, and insurance-paid repairs that arrive in pieces. The books have to keep storm work separate from ordinary service, because the two carry different margins and, as the sections above show, sometimes different tax.

The Atlantic hurricane season runs from June 1 to November 30; the peak is September 10, with most activity between mid-August and mid-October.
Source: NOAA National Hurricane Center, Tropical Cyclone Climatology
Since August 1, 2025 a list of preparedness items is always exempt from sales tax rather than only during a tax holiday: portable generators of 10,000 running watts or less, waterproof tarps and sheeting of 1,000 square feet or less, portable gas or diesel cans of 5 gallons or less, ground anchor systems and tie-down kits, carbon monoxide alarms, smoke detection devices, fire extinguishers and batteries in the listed sizes. A shop that sells those items at retail charges no tax on them; a standby generator wired into the house is a real property installation and follows the contractor rules above.
Source: Florida Department of Revenue, TIP 25A01-05, New Sales Tax Exemptions Beginning August 1, 2025

What goes wrong

The Florida mistakes we fix most often

1Charging tax on a central air or furnace replacementA central air-conditioning unit or furnace is a fixture, so on a lump-sum job the customer pays no tax at all. The tax was paid at the supply house. We set the customer invoice template so a real property job carries no tax line, and we code the materials purchase as taxed at source.
2Not charging tax on window units and free-standing appliancesThe same shop that charges nothing on a central unit must charge tax on the full price, labor included, when it supplies and installs a window unit or a free-standing appliance, and when it repairs one with parts. We keep separate items in QuickBooks for the two kinds of work so the tax follows the item.
3Using the resale certificate on lump-sum materialsThe Annual Resale Certificate is for materials you will resell, which on a real property job means a retail sale plus installation contract. Materials bought tax free and then used on a lump-sum job carry use tax plus the county surtax. We review resale-certificate purchases each month against the contract type of the job they went to.

In QuickBooks Online

Set up tax the way Florida expects

In Florida the same shop can do a tax-free central air replacement in the morning and a taxable window-unit repair in the afternoon, so the items in QuickBooks have to carry the tax treatment, not the customer. Real property jobs carry no tax line and their materials are coded as taxed at purchase; tangible personal property sales and repairs carry tax on the full price at the county's surtax rate; retail sale plus installation contracts carry tax on the materials line. Resale-certificate purchases get matched to the job each month so use tax is paid on anything that went to a lump-sum job.

Sales tax filing is part of our monthly bookkeeping for trade shops on QuickBooks Online, from $599 a month: see HVAC bookkeeping, plumbing bookkeeping and electrical contractor bookkeeping.

See monthly bookkeeping Book a 15-minute call

Booked calls: weekdays, 9am to 5pm Eastern. By phone, or 30 minutes on Teams.

Books behind or tax set up wrong? New clients start with a free QuickBooks cleanup.

Questions

Florida owners ask

Do HVAC companies charge sales tax in Florida?

Not on a central air-conditioning unit, furnace or heat pump that becomes part of the building: the contractor pays tax on the equipment and materials when buying them and charges the customer nothing, labor included. Yes on a window air-conditioning unit or a repair of one with parts: the customer pays tax on the whole bill, including the labor.

Source: GT-800067

Is plumbing labor taxable in Florida?

No, when the work is a repair or improvement to real property: pipes, water heaters, sinks and fixtures. Labor to repair tangible personal property, such as a free-standing appliance, is taxable along with the parts when parts are used; a labor-only repair is not, if the invoice shows no parts.

Source: GT-800067

Do electricians charge sales tax in Florida?

Not for wiring, panels, wired lighting and other work on the electrical system of a building, which is real property. The electrician pays tax on the materials when buying them. Supplying and installing tangible personal property, for example a portable generator or a free-standing appliance, is a retail sale with tax on the full price.

Source: GT-800067

Does a Florida contractor need a sales tax registration?

A real property contractor on lump-sum jobs does not register unless it owes use tax on items it fabricates. A business that repairs tangible personal property, or that sells tangible personal property at retail, must register as a dealer and collect sales tax and the county surtax. Registration is online or on Form DR-1.

Source: GT-800067

How often do I file sales tax in Florida?

It depends on how much you collect a year: monthly above $1,000, quarterly at $501 to $1,000, semiannual at $101 to $500, annual at $100 or less. Most new businesses start quarterly. Returns are due on the 1st and late after the 20th, and once you have paid $5,000 or more in a state fiscal year you must file and pay electronically.

Source: Florida Department of Revenue, Sales and Use Tax

Can you set this up in our QuickBooks?

Yes. Sales tax filing is part of our monthly bookkeeping for trade shops on QuickBooks Online. For Florida that means separate items for real property work and tangible personal property work, each job marked lump sum or retail sale plus installation, the county surtax rate on the job's county, resale-certificate purchases reviewed against the jobs they went to, and the return filed before the 20th with the collection allowance taken.

Sources

Every rule above was read in these Florida documents. Open the source before you change how you bill.

Other states

The short answer for every state is in contractor sales tax by state. Full guides so far: