SALT Report 2576 – The Washington Department of Revenue issued an industry guide regarding the application of sales and use tax and business and occupation tax to landscaping and horticultural services.
The guide provides that purchases and rentals of tools and equipment used in the provision of landscaping or horticultural services are subject to sales and use tax. However, purchased items that will be directly resold to a customer can be purchased without paying sales tax if the landscaper has a reseller’s permit. If the landscaper purchases items on behalf of their customer without paying tax, and is asked to install these items, the guide reflects that this does not constitute a taxable use by the landscaper.
Landscaping services provided to businesses and homeowners’ should be taxed based on the rate in effect at the job location. Income derived from these services should be reported under the retailing classification of the B&O tax.
Landscape design services should be reported under the service and other activities B&O classification. However, if both design and installation services are provided, the total amount received for these services should be reported under the retailing B&O classification and the sales tax must be remitted to the Department.
Horticultural services provided to farmers should be reported under the service and other activities B&O classification. Items that will be applied directly on a farm, such as fertilizer, are subject to sales tax. However, if these items are separately billed to the farmer, they can be purchased using a reseller permit.
If a general contractor hires a landscaper and provides a reseller permit, the landscaper should report the income from that work under the wholesaling B&O classification. The landscaper is not required to collect retail sales tax from the general contractor.
For purposes of the publication, landscaping and horticultural services include:
- Yard maintenance
- Pruning and cultivating of fruits, flowers, vegetables, trees
- Installation of sod, the planting of trees, flowers or shrubs
- Weeding, mowing, and brush removal
- Installation of paths, tables, benches, fences, and retaining walls
- Installation of sprinkler systems, pools, and fountains
- Applying pesticides and herbicides
- Land leveling services, and
- Tree trimming
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