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Bill aims to clarify sales and use tax rules for landscaping industry
Summary
House File 952 would standardize sales-tax treatment of detachable equipment and make most land-clearing services non-taxable to reduce administrative burden for landscaping businesses; sponsors and industry groups said the measure simplifies compliance and was laid over for possible inclusion in the omnibus tax bill.
Representative Virgil Kosnick presented House File 952 to the House Taxes Committee, saying the bill "helps bring a bit of consistency to the way the landscaping or green industry is taxed." The two main provisions would (1) make purchases of detachable equipment taxable (removing situational complexity) and (2) make land clearing a nontaxable service where currently its taxability varies by circumstance.
Industry witnesses told the committee the current mix of taxable and nontaxable rules is costly and confusing for small and medium landscape firms. Greg Krogstad, CEO of Rainbow Tree Companies, said customers and vendors face uncertainty when the same detachable piece of equipment can be taxable or exempt depending on use. "Businesses cannot afford to purchase two separate pieces of detachable equipment and swap them out based on whatever job they're doing," Krogstad said, asking the committee to simplify by applying sales tax to detachable equipment.
Paulita LaPlante, co-owner and chief strategic officer of Prescription Landscape, described real-world examples where land clearing for different purposes on the same property could be treated differently under current law, exposing small firms to audits and penalties. She said making land clearing nontaxable would reduce onerous compliance costs and clarify treatment for businesses and clients.
Multiple committee members, including Representative Robbins and Chair Joaquin, voiced support for simplification to help small businesses. Representative Robbins said many small landscape operators preferred to accept a clearer tax rule even if it meant paying sales tax on some equipment, because it reduced administrative cost. The Department of Revenue did not offer testimony at this hearing.
Representative Kosnick moved that House File 952 be laid over for possible inclusion in the omnibus tax bill; the motion was renewed and carried as laid over. The bill's sponsors said they would continue to coordinate with stakeholders and nonpartisan staff to finalize fiscal estimates before omnibus inclusion.
Speakers referenced below are those who testified or asked substantive questions during the hearing.
