Sales Tax Audit Attorney for Landscaping Services in Texas
Although many states do not apply sales tax to landscaping services, Texas does! This makes sense, as the weather allows for landscaping throughout the year. This is a thriving business that the Comptroller can surely take advantage of in terms of collecting more sales tax.
The $5,000 Rule
If you earn less than $5,000 per year in your landscaping business, then you do not have to collect sales tax.
Taxable Landscaping and Lawn Care Services
Taxable landscaping and lawn care services include the following:
- Planting, transplanting, relocating, and removing indoor or outdoor plants.
- Identifying, preventing, or curing plant diseases.
- Pruning, bracing, spraying, fertilizing, and watering plants.
- Planting, mowing, trimming, and edging grass or other ground cover.
- Planting and maintaining flower gardens.
- Trimming, spraying, and maintaining trees.
Non-Taxable Landscaping and Lawn Care Services
The following landscaping and lawn care services are not taxable:
- Mowing pipeline or highway rights-of-way.
- Trimming trees away from power lines.
- Harvesting, cultivating, mowing, and fertilizing farm or forest land.
- Mowing cemeteries.
Important Note on Invoicing
You should separately state charges for non-taxable services from charges for taxable services. Otherwise, your total charge will be presumed taxable if the taxable portion is greater than 5 percent.
You or your customer may overcome the presumption through documentary evidence that establishes the percentage related to non-taxable services. Your invoices or contracts should clearly identify the services you perform.
Facing a sales tax audit in Texas? Contact our attorney for a consultation.
Frequently Asked Questions
Do I have to collect sales tax if my landscaping business earns less than $5,000 a year?
No. If your landscaping business earns less than $5,000 annually, you are not required to collect sales tax in Texas.
Which landscaping services are taxable in Texas?
Taxable services include planting, mowing, trimming, edging grass, pruning, spraying, fertilizing, tree maintenance, and any activity related to the care or alteration of plants or lawns.
What landscaping services are not subject to sales tax?
Services like mowing pipeline or highway rights-of-way, trimming trees near power lines, and maintaining farm, forest, or cemetery land are not taxable.
How should I handle invoices that include both taxable and non-taxable services?
You should clearly separate the charges for taxable and non-taxable services. If not, the entire invoice may be presumed taxable if the taxable part exceeds 5% of the total.
What if I’m facing a sales tax audit as a landscaper in Texas?
If you’re facing a sales tax audit, it’s advisable to consult with a sales tax audit attorney familiar with Texas regulations to protect your business and ensure compliance.