Landscaping service sales tax,diy landscape design no grass,landscape timber wall - Test Out

This post has been adopted from the Minnesota Department of Revenue’s Sales Tax Fact Sheet #121, Lawn and Garden Care, Tree and Bush Service, Landscaping. Charges for tree, brush, and shrub trimming, cutting and spraying services performed under utility lines are taxable, including separately stated labor, equipment or chemical charges.
Mowing or spraying to control or kill weeds under utility lines, in ditches along roads, freeways, and railroad right-of-ways is not taxable, unless the area is a lawn or garden.
All of the taxable services described on this page are exempt from tax if they are for maintenance of cemetery grounds for human burial.
Pay sales tax to the seller when you buy these items or report use tax on your cost of the items. Note: Providers of nontaxable services must pay tax on all material, supplies and equipment used in providing their services. Lubricants and antifreeze may be purchased exempt for vehicles if 50 percent or more of the mileage is accumulated in directly providing a taxable service. An exemption applies to certain fuels for equipment used directly in providing taxable services. To request a refund of state petroleum tax paid, download Form PDR-1, Minnesota Motor Fuel Claim for Refund from our website or call the Petroleum Division at 651-296-1961 to request the form.
Certain materials you use or consume directly in providing taxable lawn and garden services; and tree, bush, and shrub services are exempt from sales tax. Note: If you buy materials exempt from tax but use them in providing nontaxable services, you must pay use tax on those materials.
There is also an exemption for separate detachable units used in providing taxable services.
Its ordinary useful life must be less than twelvemonths when used in providing taxable services under the normal use of the taxable service provider. Landscaping contracts are improvements to real property and are treated as construction contracts. If you sell shrubbery, plants, sod, trees, bushes, etc., without installation, you must collect sales tax.

Landscaping contractors who grow their own nursery stock for use in landscaping contracts must pay sales or use tax on the cost of all taxable items used to produce the plants.
If you grow nursery stock to sell at retail, items used or consumed in production, such as seeds, seedlings, fertilizers, chemicals, water, or fuels may be purchased without tax by giving the seller a fully completed Certificate of Exemption, Form ST3, claiming the agricultural production exemption.
Qualifying nonprofit organizations must give you a fully completed Certificate of Exemption, Form ST3, to claim exemption on purchases of goods or services. If you have a landscaping contract with an exempt organization, you must pay sales tax on all trees, plants, or other materials used in the landscaping contract.
If you sell equipment or other items that were used in your business, the sale may be subject to sales tax. If you are located or working in an area with a local tax, local sales or use tax may also be due. This fact sheet is intended to help you become more familiar with Minnesota tax laws and your rights and responsibilities under the laws. Examples of vehicles that directly provide taxable services are trucks used to haul away tree trimmings or vehicles used to spray lawns. When you buy gasoline from a pump at a gas station, the price already includes the petroleum tax (both state and federal). Also, this exemption applies only to businesses providing taxable services and does not extend to individuals or businesses purchasing materials for their own use. Hand tools such as hammers, screwdrivers, knives, and power hand tools are not separate detachable units and are taxable. As a contractor, the landscaper must pay sales or use tax on the cost of all plants, trees, bushes, shrubs, sod, and other materials, supplies, and equipment used to complete the contract. Machinery used directly and principally in production of trees and shrubs for sale at retail qualifies for the farm machinery exemption.
See Fact Sheet 132, Occasional Sales of Business Equipment and Goods, for more information.
However, if the seller does not charge Minnesota sales tax on equipment, supplies, or other taxable items you purchase for use in your business, you must pay use tax.

Local taxes are listed and explained in detail in Fact Sheet 164, Local Sales and Use Taxes.
Nothing in this fact sheet supersedes, alters, or otherwise changes any provisions of the tax law, administrative rules, court decisions, or revenue notices. If less than 50 percent of the mileage is for providing a taxable service, only the portion of the lubricants and antifreeze actually used while directly providing the service is exempt. You may request a refund of the state petroleum tax paid on fuel you use in lawn mowers, chain saws, or other off-road items that are used in providing taxable services.
The sales tax should be included as a part of the material costs to the customer, but should not be separately stated on the invoice. If you sell any of this nursery stock at retail, charge sales tax on the total selling price. If any of the nursery stock is later used on a landscaping contract or in some other taxable manner, report the cost of the items or materials subject to use tax when you electronically file your sales and use tax return. For more information, see “Handling Sales Tax on Repair Paint and Materials” This fact sheet is specific to motor vehicle body and interior repairs.
The guidelines for when and how you pay tax on the materials purchased are based on whether you are primarily a contractor or primarily a retailer. Since you already paid tax on your cost of materials, report only the difference between the sales price and your cost of materials to grow them when you electronically file your sales and use tax return.
However, if the seller does not charge Minnesota sales tax, the contractor owes use tax to Minnesota on the cost of the materials. See guide to Minnesota Sales Tax for Labor, Installation, Construction, and Fabrication, which was updated in 2013.
Minnesota sales and use tax is due when a business buys storage or warehouse services for its tangible personal property, except as noted below.

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