Tax Type
Retail Sales and Use Tax
Description
Florists and nurseries; Landscaping services and materials.
Topic
Taxability of Persons and Transactions
Date Issued
05-22-1998
May 22, 1998
Dear**********:
This will reply to your recent letter in which you request a ruling on behalf of your client, (the "Taxpayer'), with respect to the proper sales and use tax treatment of the Taxpayer's landscape contracting operation.
The department's policy with respect to landscape contractors is well founded and longstanding. Title 23 of the Virginia Administrative Code (VAC) 10-210-610 (copy enclosed, previously VR 630-1040) specifically states the tax applies to the retail sale of "flowers, potted plants, shrubbery, nursery stock, sod, wreaths, bouquets, and similar items.' It is only when a landscape contractor goes beyond the sale of shrubbery, trees, sod, etc., and contracts to grade, seed and fertilize, that the contractor becomes the user and consumer of all tangible personal property used in providing such services. The regulation is clear that a landscape contractor is considered a retailer with respect to shrubbery, sod and similar items, whether the contractor cultivates and transplants such items or purchases them for resale.
Based on the above, and the facts set forth in your letter, you are correct that the Taxpayer would pay sales tax to suppliers when purchasing items including, but not limited to, grass seed, fertilizer, mulch, and similar items for their own use in performing contract services. Conversely, the Taxpayer would not pay tax on shrubbery, trees, sod, and similar items at the time of purchase, but would collect the tax on the retail sale of such items at the time of sale. Separately stated labor charges would not be subject to the tax.
If you should have any questions, please contact *****, Office of Tax Policy, at *****.
Dear**********:
This will reply to your recent letter in which you request a ruling on behalf of your client, (the "Taxpayer'), with respect to the proper sales and use tax treatment of the Taxpayer's landscape contracting operation.
The department's policy with respect to landscape contractors is well founded and longstanding. Title 23 of the Virginia Administrative Code (VAC) 10-210-610 (copy enclosed, previously VR 630-1040) specifically states the tax applies to the retail sale of "flowers, potted plants, shrubbery, nursery stock, sod, wreaths, bouquets, and similar items.' It is only when a landscape contractor goes beyond the sale of shrubbery, trees, sod, etc., and contracts to grade, seed and fertilize, that the contractor becomes the user and consumer of all tangible personal property used in providing such services. The regulation is clear that a landscape contractor is considered a retailer with respect to shrubbery, sod and similar items, whether the contractor cultivates and transplants such items or purchases them for resale.
Based on the above, and the facts set forth in your letter, you are correct that the Taxpayer would pay sales tax to suppliers when purchasing items including, but not limited to, grass seed, fertilizer, mulch, and similar items for their own use in performing contract services. Conversely, the Taxpayer would not pay tax on shrubbery, trees, sod, and similar items at the time of purchase, but would collect the tax on the retail sale of such items at the time of sale. Separately stated labor charges would not be subject to the tax.
If you should have any questions, please contact *****, Office of Tax Policy, at *****.
Rulings of the Tax Commissioner