Landscaping Materials
The gross receipts from landscaping materials that are used in providing landscaping services and which are sold to final consumers are subject to sales tax. “Landscaping materials” includes sod, dirt, trees, shrubbery, bulbs, sand, rocks, woodchips, and other similar materials.
For the purpose of this rule, final consumer ordinarily means the owner of the land to which the landscaping materials are applied, or a general building contractor when the landscaping contractor contracts with the general building contractor. When a landscaping contractor uses materials to fulfill a contract, the landscape contractor is considered the retailer of the landscaping materials and is obligated to collect sales tax on the selling price from the final consumer.
When the retailer of sod, dirt, trees, shrubbery, bulbs, sand, rock, woodchips, and other similar landscaping materials installs these items as a part of a contract for landscaping or improving land for a lump sum, the entire gross receipts are subject to tax. Any retailer’s charges for landscaping are taxable. However, a retailer’s charges for nontaxable services are not taxable if contracted for separately; or, if no written contract exists, the charges are itemized separately on the invoice.
Examples:
- A sodding contractor agrees to furnish and install 20 yards of sod for a lump sum. The sodding contractor must charge the customer sales tax on the lump sum.
- Company A enters into a contract for the landscaping of an existing office building. Company A agrees to furnish shrubs, white rock, and woodchips. Company A also contracts to install all of the landscaping materials for an hourly fee. Company A’s hourly fee is taxable.
- If the contractor charges separately for a service that is not taxable, the charge is excluded from tax because it was separately contracted for.
Landscapers as Construction Contractors
Any portion of a landscaping service that includes labor and materials to erect a structure is considered construction contracting, not landscaping service, and is generally exempt from sales tax. “Structures” include such items as retaining walls, lawn lighting systems, lawn irrigation systems, pools, walkways, and any other permanently attached item to realty or real estate. To be exempt from sales tax, the invoice must state the charges for construction contracting separate from landscaping charges.
By statute, a landscaper is considered the consumer of any construction materials used in the performance of construction contracting and must therefore pay sales taxes and applicable local option taxes on all construction materials they purchase.