Guide Sales Tax Guide for Landscapers

This guide provides some general information on tax issues specific to landscapers and resources for registering, filing returns and making payments. It is not intended to be used as a legal ruling, but merely as a general guide for sales and use taxes as they relate to landscapers. Not every tax situation is covered in this guide. If you have questions about the taxes on the goods or services you provide, see the “Contact Us” section of this guide.

Table of Contents

Overview

Generally, landscapers act as contractors and are the consumers of tangible personal property (material) purchased by them for use in the performance of their contracts. As such, they are required to pay sales or use tax on the total price of the material purchased at the time of purchase, unless the purchase is exempt from tax.

For example, the sale of certain items such as fertilizer and plants suitable for planting to produce food for human consumption may be exempt from sales/use tax.

See G.L. c. 64H, Section 6(p)(3) and (4). There are also other exceptions when landscapers perform contracts for organizations that are exempt from sales tax under G.L. c. 64H, Section 6(d) and/or Section 6(e).

If a landscaper does not pay sales tax at the time of sale and the material is subject to tax, the landscaper must:

  • Self-assess a use tax on the cost of the material and
  • Remit the tax to the Department of Revenue (DOR).

If the landscaper has a physical (retail) location where it makes sales of tangible personal property, it will be considered a retailer. Also, where a landscaper agrees to sell material, whether or not there is a retail location, and provides installation or other services for a separate price, the landscaper is:

  • Acting as a vendor and  
  • Required to collect the sales tax based only on the price the landscaper charges their customer for the materials.

Separately stated charges for installation and other services are not subject to sales tax.

Landscapers, depending upon the facts and circumstances, could be both contractors and retailers.

Examples of Landscaper Contracts

In each of the following examples, the landscaper is a contractor and the sales are exempt from sales tax to the landscaper’s customer.

1. Bob’s Landscaping performs lawn care services for customers including:

  • Spring and fall cleanup
  • Lawn seeding
  • Sod installation
  • Mowing and trimming
  • Spreading bark mulch
  • Aerating
  • Dethatching and
  • Power raking.

The services are not taxable to the customers and the landscaper is considered the consumer of all of the mulch, seed, sod and any other material purchased to perform the services for which Bob’s Landscaping was hired. Sales or use tax is due on the price paid by the landscaper to the vendor(s).

2. Bob’s Landscaping provides a customer seed and also provides the customer with non-taxable services such as:

  • Application of the seed and fertilizer and
  • Lawn maintenance services.

Bob’s Landscaping is required to pay use tax on the seed.

3. Bob’s Landscaping performs snow removal services and, along with plowing, applies:

  • Sand
  • Salt and
  • De-icing materials to the driveway and walkways.

Bob’s Landscaping bills the customer a lump-sum amount for the snow removal services. The services are not taxable to the customer. The landscaper is considered the consumer of all sand, salt and de-icing materials purchased to perform the services for which he was hired and sales or use tax is due on the total price paid to the vendor(s).

4. Bob’s Landscaping is hired by a customer to furnish, install and care for a tree for a year and charges the customer $300. Bob’s Landscaping purchases a tree from Green’s Nursery for $100. Bob’s Landscaping is a contractor and is considered the final consumer of the tree. Bob’s Landscaping pays the nursery sales tax calculated on the $100 purchase price for the tree. There is no sales tax due on the $300 charge to perform the services for his customer.

5. In addition to providing regular lawn services at an Office Park, Bob’s Landscaping also provides seasonal plantings as part of its annual maintenance contract with the Office Park. The plants and other materials used by Bob’s Landscaping are not separately stated on any invoice to the Office Park. The annual contract for maintenance services is exempt from the sales tax and Bob’s Landscaping must pay sales or use tax on the total price paid to the vendor(s) for the materials.

6. Bob’s Landscaping enters into an agreement with a customer to provide:

  • Design services
  • Taxable garden plants
  • Other materials
  • Paving stones for a walkway and
  • Labor

to complete a project. Bob’s Landscaping is a contractor and pays the sales or use tax on the materials purchased from its vendor(s). Bob’s Landscaping is considered the consumer of all material purchased to perform the services for which he was hired and sales or use tax is due on the total price paid to his vendor(s) for the materials.

7. Bob’s Landscaping purchases

  • Tractors
  • Lawn mowers
  • Trimmers
  • Leaf blowers and
  • Hand tools

and rents

  • Backhoes and
  • Front-end loaders

without operators from Brown’s Equipment Co.

In the event that Brown’s Equipment Co. neglects to charge Bob’s Landscaping sales tax on the purchase or rental of the equipment, Bob’s is required to:

  • Accrue use tax and
  • File a Form ST-9.

In all of these examples, the landscaper is:

  • The consumer of the materials purchased to perform the services for which it was hired and
  • Required to pay the sales tax to the vendor(s) on the purchase price of the material.

If you need more information, see the “Contact Us” section below.

In the event that a vendor neglects to charge the sales tax, the landscaper is required to self-accrue use tax and pay over this amount on Form ST-9.

Examples of Taxable Retail Sales

1. Green’s Nursery has a garden center where it sells:

  • Trees
  • Shrubs
  • Plants
  • Flowers and
  • Gardening materials

in addition to landscaping services.

A customer purchases 3 plants that they carry home for planting. The sale is a taxable sale of tangible personal property and Green’s Nursery is required to collect sales tax from its customer.

2. Green’s Nursery sold a large tree to a customer who also hired Green’s Nursery to plant the tree. Green’s Nursery separately stated the cost of installing the tree on the invoice. Green’s Nursery was required to collect sales tax from its customer of the purchase price of the tree because it is a taxable sale of tangible personal property. There is no sales tax due on the separately stated charges for installation of the tree.

3. Green’s Nursery sold a large tree to a customer for $100 and charged the customer an additional $200 for installation. On its invoice to the customer, Green’s Nursery does not separately state the charge for the tree apart from the installation charges. The entire combined charge is taxable to the customer because the value of the material, in this case a tree, is more than 10% (consequential) in relation to the total charge.

4. Green’s Nursery sells plants and materials to Bob’s Landscaping, which Bob’s Landscaping uses in the performance of landscaping service. Bob’s Landscaping is:

  • The consumer of the materials purchased to perform its services and
  • Required to pay the sales tax to Green’s Nursery on the purchase price of the materials.

In the event that Green’s Nursery neglects to charge the sales tax, Bob’s Landscaping is required to:

  • Self-accrue use tax and
  • Pay over this amount on Form ST-9.

5. Bob’s Landscaping purchases from Green’s Nursery:

  • Mulch
  • Soil
  • Seed
  • Sod
  • Plants
  • Pavers and
  • Other material Bob’s Landscaping uses to perform services for its customers.

Bob’s Landscaping does not separately state the material used and the labor charged on its invoices to customers. Bob’s Landscaping should pay sales tax to Green’s Nursery on its purchase of materials.

Examples of Non-Taxable Retail Sales

There may be times when a landscaper is hired to perform landscaping services for customers who are exempt from paying sales tax under G.L. c. 64H, Section 6(d) and/or Section 6(e), such as:

  • The U.S. Government
  • The Commonwealth of Massachusetts
  • A Massachusetts state agency
    • or their agents
  • Religious, charitable, scientific, literary and educational organizations or
  • other similar 501(c)(3) organizations.

There also may be times when a landscaper is hired to perform landscaping services for customers when the items purchased are exempt from the sales tax under G.L. c. 64H, Section 6(p).

1. Green’s Nursery enters into a contract with a church to sell 10 shrubs and install them in the front of the church. The church is a tax-exempt organization and has a tax-exempt certificate (Form ST-2). The church provides Green’s Nursery with a completed and signed Sales Tax Exempt Certificate (Form ST-5) with a copy of the Form ST-2. No sales tax is due on this sale.

2. Green’s Nursery sells plants and materials to Bob’s Landscaping who has a contract to:

  • Purchase trees, shrubs and other material on behalf of the local Town, an exempt organization under G.L. c. 64H, Section 6(d) and/or Section 6(e), and
  • Install them around the Town Hall.

If Bob’s Landscaping presents a completed ST-5C to Green’s Nursery, the purchase is exempt from the sales and use tax.

Also, if a landscape contractor, acting as an agent of an exempt organization, such as:

  • The U.S. Government
  • The Commonwealth of Massachusetts
  • A Massachusetts state agency
  • Religious, charitable, scientific, literary, and educational organizations or
    • Other similar 501(c)(3) organization

presents a properly completed ST-5C to vendor, the purchase is exempt from the sales and use tax.

3. Bob’s Landscaping enters into a contract to install a vegetable garden and fruit orchard for a customer. Bob’s Landscaping purchases various vegetable plants, vegetable seeds, berry bushes/plants along with several fruit trees from Green’s Nursery.

The items purchased by Bob’s Landscaping are exempt from sales and use tax because they are plants to produce food for human consumption under G.L. c. 64H, Section 6(p)(4). No sales tax is due on this sale.

4. Green’s Nursery sells pesticides and a combination fertilizer/pesticide products at retail to Bob’s Landscaping. Bob’s Landscaping is licensed/ certified as a pesticide applicator by the Department of Agricultural Resources and presents Green’s Nursery with a Form ST-12 Exempt Use Certificate. The purchase is exempt from sales and use tax.

Landscapers as a Retailer

A landscaper with a retail store that sells

  • Taxable plants
  • Mulch
  • Pavers
  • Sod
  • Yard art and
  • Other materials and products

is a retailer.

When a landscaper purchases material that will be resold to its customers in its retail outlet, the landscaper should present a completed and signed resale certificate (ST-4) to its supplier at the time the material is purchased. The landscaper is not required to pay sales or use tax on the items purchased for resale.

1. Bob’s Landscaping sells a customer a piece of yard art and several plants from its store. Bob’s Landscaping should collect sales tax from its customer on the retail price of the material excluding from the retail price any cost for delivery.

2. Bob’s Landscaping owns and operates a retail store selling plants, mulch, seed, pavers, sod, yard art and other materials and products. When Bob’s Landscaping purchases material from its vendor that will be resold to Bob’s customer in its retail store, Bob’s Landscaping should present a completed and signed resale certificate (ST-4) to its supplier at the time the material is purchased.

Certificates Needed to Claim Exemption

  1. Certificate of Exemption (Form ST-2). Exempt organizations register with the Department of Revenue and are issued a Form ST-2. When presented with an Exemption Certificate (Form ST-5) for purchasing material for use in the conduct of their business, the Form ST-2 must be in effect and not expired at the time of purchase.
  2. Sales Tax Resale Certificate (Form ST-4). When landscaper acts as a vendor and purchases material for resale, the landscaper must provide a completed copy of a Form ST-4, Sales Tax Resale Certificate, to the vendor instead of paying sales tax. Sales tax will be due when the vendor sells the tangible personal property to the ultimate consumer of the goods.
  3. Sales Tax Exempt Purchaser Certificate (Form ST-5). When an exempt organization purchases material for use in the conduct of its business, it must provide a completed copy of an ST-5, Sales Tax Exempt Purchaser Certificate. Government organizations (public schools, city/town government, state agency, etc.) should attach a copy of their Form ST-2, if available (see #1). If unavailable, enter the exemption number, if known. Exempt organizations (501(c)(3) organizations) such as private schools, Scout troops etc., must attach a copy of their Form ST-2.
  4. Contractor’s Sales Tax Exempt Purchase Certificate (Form ST 5C).  Where a landscaper is acting as a contractor or subcontractor performing construction services on behalf of a customer claiming a sales tax exemption under G.L c. 64H section 6(d), 6(e), the landscaper must provide a completed Form ST 5C to the vendor when purchasing material used pursuant to the contract.
  5. Exempt Use Certificate (Form ST-12).  A landscaper may provide Form ST-12 to the vendor when purchasing material which are to be used in an exempt manner as provided by G.L. c. 64H, Section 6(r) and Section 6(s).

 

For additional information about the rules for exemption certificates, see Massachusetts Regulation 830 CMR 64H.8.1, Resale and Exempt Use Certificates. (See More Info section below).

Additional Resources for Certificates Needed to Claim Exemption

Other Tax Obligations

The above information provides some general sales and use tax information for this specific industry, but this guide is not intended to provide a complete discussion of the sales/use tax requirements for this industry. A business operating in Massachusetts may have other tax obligations, such as income tax, corporate excise and/or withholding tax.

For more information concerning Massachusetts state business taxes including sales/use tax, visit Business Taxes/ or contact DOR at (617) 887-6367 or (800) 392-6089 from 8:30 a.m. to 4:30 p.m. business days. To register your business and file and pay your business taxes, visit MassTaxConnect.

Learn how to...

Register online. Go to MassTaxConnect to register for your sales tax permit. The system will guide you through the process.

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File Returns and make payments. Login to MassTaxConnect to file your returns and make payments online.

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More info

  • GL c. 64H § 1: Definitions: Sales Price
  • GL c. 64H § 2: Excise imposed on sales at retail by vendor of tangible personal property
  • GL c. 64H § 6(d), 6(e), 6(f) & 6 (p)
  • 830 CMR 64H.1.1 Service Enterprises
  • 830 CMR 64H.8.1 Resale and Exempt Certificates
  • 830 CMR 62C.25.1  Records Retention
  • Technical Information Release 08-8: Limitations on Exemption for Pesticides
  • Letter Ruling 85-34: Sales to 501(c)(3) Organizations
  • Letter Ruling 81-71: Installation and Maintenance Charges (separately stated installation charges)
  • Letter Ruling 79-46:  Massachusetts Contractor with Out-of-State Customers (contractors, consumers of materials used)
  • Letter Ruling 09-1:  Massachusetts Sales/Use Tax Exemption for Mixed Housing and Commercial Community Project (landscaping materials that become physically incorporated into real estate) 

Additional Resources for More info

Contact Us

Department of Revenue

Phone:

  • If you have general questions about filing your taxes or taxability of good or services you provide, contact customer service at (617) 887-6367 or (800) 392-6089 (toll-free in Massachusetts).
  • If you have questions about public written statements and ruling requests, recent legislation, or other legal issues, contact the Rulings and Regulations Bureau at RulesandRegs@dor.state.ma.us 

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