Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
190.0000 CONSTRUCTION CONTRACTORS—Regulation 1521
(a) IN GENERAL—ACTIVITIES CONSTITUTING CONTRACTING OR MAKING OF IMPROVEMENTS
190.0480 Landscape Contractors. Landscape gardeners, who enter into lump-sum contracts for landscaping in which they furnish plants, trees, etc. are governed by the provisions of Regulation 1521, "Construction Contractors."
The installation of a lawn is an improvement to realty and the contractor is the consumer of materials utilized and subject to tax thereon.
Shrubs and plants used in connection with landscaping contracts are similar to "fixtures." A landscape contractor is the retailer of plants and shrubs he/she furnishes in connection with his/her services, and tax applies to the sales price of such plants and shrubs. In the case of lump-sum contracts, the selling price of such shrubs and plants is regarded as the cost price. If plants or shrubs have been grown or produced by the contractor, the cost price is deemed to be the price at which similar plants or shrubs in similar quantities ready for installation are sold by the contractor to other contractors.
If a landscape contractor purchases such plants and shrubs from nurseries and pays sales tax on those purchases, and makes no use of them (other than retention, demonstration, or display while holding them for resale in the ordinary course of business), he/she is entitled to a deduction for "tax-paid purchases resold." 3/25/53; 4/18/66; 1/14/85. (Am. 2004–2).