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Lawmakers consider narrowing exemptions, clarifying sales tax for landscaping services
Summary
Sen. Klein's Senate File 297 would remove some detachable‑parts exemptions and clarify that land‑clearing services are non‑taxable to reduce confusion for landscaping businesses; witnesses said the change would simplify compliance for small firms and the committee laid the bill over.
Senator Klein brought Senate File 297 to the Tax Committee seeking to resolve long‑standing confusion in the nursery and landscape sector over when sales tax applies to detachable equipment parts and to clarify the tax treatment of land‑clearing services.
"This bill came forward from the landscaping industry itself to simplify their tax exemptions," Klein said. Section 1 would treat detachable accessories and replaceable units (for example, chainsaw chains and lawnmower blades) as taxable items rather than exempt depending on use. Section 2 would make land‑clearing services for tree, brush, shrub and stump removal non‑taxable to remove ambiguity over whether removal tied to property development or renovation should be taxed.
Witnesses from the landscaping industry told the committee vendors and small business owners face recordkeeping and audit risk when the same detachable part might be used for a taxable and a nontaxable service on the same day. Gregg Krogstad, CEO of Rainbow Tree Care, said his company already often pays tax on such parts to avoid audit risk and that clear rules would reduce compliance burden. "We would rather pay the sales tax and continue to work and remove this confusion and unnecessary complexities," he testified.
Action: The committee laid Senate File 297 over for omnibus consideration; the bill includes a fiscal note and the committee said it will review the Revenue Department estimate during bill drafting.
Ending: Sponsors said the bill aims to reduce administrative burdens for small landscaping firms while clarifying residue policy for local governments and contractors.
