Materials purchased in one taxing jurisdiction in New York may be subject to a different tax rate (higher or lower) if the materials are later used in a capital improvement project in a different jurisdiction in New York. However, in certain circumstances, landscapers can use Form ST-120.1, Contractor Exempt Purchase Certificate, to make purchases exempt from sales tax. Landscapers do not normally sell materials to customers without installation and, therefore, cannot use Form ST-120, Resale Certificate, to make purchases exempt from tax. The sales tax paid by landscapers becomes an expense that can be passed through to the customer as part of the overall charge for the capital improvement. Materials and other tangible personal property purchased for use in landscaping are taxable, whether purchased by a landscaper, subcontractor, or the customer. The removal of shrubs and trees to improve the landscape without replacement or not otherwise part of a capital improvement project is considered maintenance of real property and is a taxable service. This project qualifies as a capital improvement because the end result is the planting of a new shrub. The landscaper cuts the tree, grinds the stump, and plants a lilac bush in its place. The contractor does not need to charge sales tax on this service because the work is done in conjunction with a capital improvement project.Įxample: A property owner hires a landscaper to remove a tree from his yard. Before construction can begin, a tree adjacent to the current structure must be removed. The removal of shrubs and trees qualifies as a capital improvement only when done in conjunction with another capital improvement project.Įxample: A homeowner hires a contractor to build an addition to her home. installing permanent ponds and water features.
It is intended to become a permanent installation.Įxamples of capital improvement projects include:.
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