Customers often ask about sales tax on our jobs. Some landscape companies charge sales tax on top of the contract price. We do not, and here is why.
Our previous Attorney General, Mike Cox, provided a legal opinion that sales tax should not be charged on landscape installations. When we purchase raw materials, such as trees and shrubs, or brick pavers and boulders, we pay the sales tax to our suppliers. We include that cost into our estimating formula when we sell jobs.
The sales tax topic is very confusing because labor is non taxable. If you were to purchase a new muffler at the repair shop they would charge you for the muffler, sales tax, and then the labor. It was determined that because landscaping is so labor intensive it was not practical to separate the cost. Similar to buying a new home from a builder. The sales tax on the material is paid for by the builder or sub-contractors and is included in the new home price.
If we were to deliver material and unload them in your driveway then we would charge sales tax because you are the end user. Once labor and installation is involved, the sales tax on the products is paid for by the contractor who is the end user.
Never pay sales tax on top of a contract price for landscape installation.