Florida Creates New Refund-Based Sales Tax Exemption for University and College Public Works

The Florida Department of Revenue recently issued Tax Information Publication 26A01-10 to explain a new sales and use tax exemption for tangible personal property incorporated into public works owned by state universities and Florida College System institutions. The exemption became effective on July 1, 2026.

This new provision may reduce construction costs for public higher education projects throughout Florida. However, taxpayers should not expect a traditional exemption certificate process. Instead, Florida lawmakers structured the benefit as a refund of tax previously paid.

As a result, universities, colleges, contractors, and tax advisors should understand both the scope of the exemption and the related documentation requirements.

What Does the New Exemption Cover?

Under TIP 26A01-10, the exemption applies to sales of tangible personal property purchased by contractors employed directly by, or acting as agents of, a state university or Florida College System institution when the property goes into or becomes part of public works owned by the institution. 

The Department specifically explains that the exemption is available only when the tangible personal property becomes installed in, or incorporated into, the public works project. 

Importantly, the exemption includes both Florida sales tax and any applicable discretionary sales surtax.

Why the Refund Structure Matters

Many Florida sales tax exemptions allow a purchaser to avoid tax at the point of sale. This new provision works differently.

The Department states that the exemption is available solely through a refund of previously paid Florida sales tax. The institution must first pay tax on the qualifying transaction and then seek reimbursement through the Department’s refund procedures. 

Therefore, institutions should establish internal processes that track qualifying purchases throughout a construction project. Likewise, contractors should maintain complete records so supporting documentation is available at refund time.

For organizations reviewing other Florida exemption programs, this update provides a useful contrast to traditional exemption certificate rules. Readers may also want to review related discussions on Florida sales tax exemptions and construction industry tax issues.

Which Institutions Qualify?

The exemption applies to state universities and Florida College System institutions.

According to TIP 26A01-10, a state university includes institutions identified in section 1000.21(9), Florida Statutes, along with branch campuses, centers, and affiliated locations.

Similarly, a Florida College System institution includes public postsecondary educational institutions identified in section 1000.21(5), Florida Statutes, including branch campuses, centers, and affiliated locations. 

This broad definition means that numerous public higher education facilities throughout Florida may potentially benefit from the new refund program.

What Qualifies as Public Works?

The Department adopts a broad definition of public works.

TIP 26A01-10 explains that public works are projects financed and owned by the government for public use or enjoyment where private parties undertake specific work involving the installation of tangible personal property that becomes part of a public facility. 

The publication further states that public works projects include repairs, alterations, improvements, and construction of real property and fixed works.

The term public facility includes land, buildings, structures, improvements to land, and related infrastructure owned or operated by a governmental entity where governmental or public activities occur. 

Consequently, many common campus construction and renovation projects may fall within the program’s scope.

How to Claim the Refund

The Department requires institutions to file refund claims quarterly.

According to TIP 26A01-10, each claim must include:

Required Forms

Form DR-26S, Sales and Use Tax Application for Refund.

Form DR-26PW, Refund of Sales Tax Paid on Tangible Personal Property Incorporated into Public Works (State Universities and Florida College System Institutions).

Supporting Documentation

Copies of invoices showing the purchase of tangible personal property. 

Evidence that Florida sales tax was paid on the property.

A copy of the institution’s Florida Consumer’s Certificate of Exemption. 

The Department indicates that taxpayers may file Form DR-26S electronically and submit Form DR-26PW along with supporting documentation through the Department’s electronic filing resources. 

Practical Considerations

Although the new exemption appears straightforward, administration may become more complex on large projects.

Universities should maintain procedures that identify qualifying purchases from project inception. Contractors should retain invoices and related tax documentation. Tax departments should establish periodic review processes to ensure refund opportunities are not overlooked.

Additionally, advisors should evaluate construction contracts to determine how tax reimbursement and documentation responsibilities will be allocated among the parties.

Because the benefit arises through a refund rather than an upfront exemption, incomplete records may delay or jeopardize refund recovery.