How did Texas tax a lawn-care provider's total customer charge and its purchases of chemicals, fertilizer, plants, supplies, and equipment?

Plain-English summary

Tax was due on the provider's total customer charge for landscaping and lawn care.

The provider could give a resale certificate for items transferred to the customer as part of the taxable service, including chemicals and fertilizer applied to lawns and plants actually resold. The provider should pay tax on supplies and equipment it purchased.

The Comptroller also sent general information about required records and collecting and reporting tax.

What this means for you

The historical guideline separated customer-transferred materials from the provider's own supplies and equipment. It was general guidance issued while fuller industry rules were still being developed.

Common questions

Was the total lawn-care charge taxable? Yes.

Could applied fertilizer and chemicals be bought for resale? Yes, as transferred items in the taxable service.

What about plants actually resold? They could receive resale treatment.

Did the provider pay tax on its supplies and equipment? Yes.

Citations and references

• No statute or rule number is cited in the ruling text.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8708L0829E07

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller August 28, 1987

Dear *****:

Thank you for your letter of July 29, 1987, concerning sales tax on
landscaping and lawn care services.

We are in the process of developing guidelines for your industry.

I don't have all the answers, however I can give you some general
guidelines.

Tax will be due on your total charge to your customer. You may give a
resale
certificate in lieu of tax on any item transferred to your customer as a
part
of the taxable service. For example, you may give a resale certificate
in
lieu of tax on chemicals and fertilizer applied to lawns and on plants
actually resold. You should pay tax on any supplies or equipment you
purchase.

I'm sending some general information on records you should keep, and
collecting and reporting the tax.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

If you have any questions or need more information, please call me at
1-800-252-5555 toll free from anywhere in Texas. The regular number is
512/463-4600. You may write me at the Tax Policy Division.

Sincerely,
Adina Whittemore
Tax Policy Division