Is landscaping a taxable real property service in Texas, and is hardscape work like retaining walls, ponds, or sprinkler systems taxed the same way?

Plain-English summary

The Texas Comptroller drew a line between two categories of outdoor work that get taxed very differently. Landscaping and lawn/yard maintenance — planting, pruning, tree surgery, mowing, trimming, fertilizing, watering, applying soil amendments — are taxable real property services. You collect tax from the customer on the total amount billed, whether the job is residential or commercial, though genuinely agricultural activities (hay baling, orchard mowing) fall outside the category entirely.

Hardscape activities — adding sprinkler systems, retaining walls, ponds, pools, fences, or other construction — are different: they improve real property rather than count as a taxable service. That means the contractor rules apply instead: as a lump-sum contractor you pay tax on everything you buy and don't charge the customer separately; as a separated contractor you charge tax only on the incorporated-materials portion of the bill, not on new-construction labor. If instead of new construction you're repairing or remodeling an existing nonresidential hardscape system, the whole charge to the customer is taxed as nonresidential repair/remodeling, and you may buy the incorporated materials tax-free for resale.

Professional design services by licensed landscape architects or engineers (consultation, plans, specifications, supervision) are excluded from both categories as professional services. There's also a carve-out for real property services performed for a contractor building a new residential structure — those are treated as new-construction-contractor work, but only once the contractor documents (in writing) that the work is part of a new-residence construction contract; until then you should presume your services are taxable.

What this means for you

Landscapers and lawn-care businesses

Collect tax on your full charge for planting, mowing, pruning, fertilizing, and similar maintenance work — this applies to both residential and commercial customers. You can buy items that get physically transferred to the customer (fertilizer, plants, potting soil, bark chips) tax-free with a resale certificate, but you owe tax on your own tools and equipment.

Hardscape and irrigation contractors

New hardscape construction (retaining walls, ponds, pools, sprinkler systems, fences) is realty improvement, not a taxable service — choose lump-sum (pay tax on your purchases, don't charge the customer tax) or separated (charge tax on materials only) contractor status. Repairing or remodeling an existing nonresidential hardscape system is taxed differently again — as nonresidential repair/remodeling on the whole charge, with your incorporated materials purchasable tax-free for resale. Agricultural irrigation new construction and certain repairs may separately qualify for agricultural exemptions.

Contractors building new residential structures

If you're a landscaper or hardscape provider working under a new-residential-construction contract, get it in writing (a contract or exemption certificate) from the general contractor — that documentation is what lets you treat the work as exempt new-construction-contractor work instead of a presumptively taxable real property service.

Accountants and tax professionals

The dividing line here is aesthetic/maintenance service (taxable real property service under the landscaping category) versus realty improvement (hardscape, taxed under the contractor framework). The same distinction extends to professional design services (engineering/architecture-adjacent) which are excluded from both categories.

Common questions

Q: Is mowing and trimming a customer's lawn taxable in Texas?
A: Yes. Lawn and yard maintenance — mowing, trimming, fertilizing, watering, and similar treatment — is a taxable real property service, on both residential and commercial properties.

Q: Is building a retaining wall or installing a sprinkler system the same tax category as landscaping?
A: No. Those are hardscape activities that improve real property, taxed under the lump-sum or separated contractor rules rather than as a taxable real property service.

Q: What if I'm repairing an existing sprinkler system for a business, not building a new one?
A: That's taxed as nonresidential repair or remodeling — tax applies to the total charge to the customer, and you may purchase the incorporated materials tax-free for resale.

Q: Does landscaping tax apply to farms or orchards?
A: No. Neither landscaping nor lawn mowing covers agricultural activities like hay baling or mowing in a pecan orchard.

Q: Can I buy plants and mulch tax-free if I'm installing them for a customer?
A: Yes, via resale certificate — as long as the care, custody, and control of those items transfers to the customer as part of the service (e.g., fertilizer, plants, potting soil, bark chips).

Citations and references

Rules:

• 34 TAC Rule 3.285, Resale Certificates; Sales for Resale (flagged in a STAR ALERT as the current guidance on care, custody, and control of tangible personal property in a taxable service — amended 11/01/2017, after this 2000 letter was issued)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/200005315L

Original ruling text

ALERT: For specific guidance relating to the care, custody and control of TPP when providing a taxable service, please see Rule 3.285, Resale Certificates; Sales for Resale (amended 11/01/2017).

May 16, 2000

Dear **:

Thank you for your recent letter regarding your landscaping business and Texas
sales tax.

Landscaping includes activities of arranging and modifying areas of land,
natural scenery and other areas, such as indoor or outdoor patios, for
aesthetic effect, considering the use to which the land is to be put. The term
includes adding, removing, or arranging natural forms, features, and plantings,
including vegetation, and other features to fulfill aesthetic requirements. It
includes the application of soil, soil additives, and amendments to prepare or
maintain the planting area. Some examples are garden planting or maintenance,
arborist services, ornamental bush or shrub planting, tree planting or removal,
tree surgery, pruning or spraying, and lawn sodding. Landscaping services
performed by landscape designers or landscape architects are taxable.

The taxability of these services is the same whether performed on residential
or commercial nonresidential) properties. However, neither landscaping nor lawn
mowing includes agricultural activities such as hay baling or mowing in a pecan
orchard.

Lawn or yard maintenance and landscaping are taxable real property services.
Lawn and yard maintenance includes mowing, trimming, fertilizing, watering and
any other treatment or service that may be performed on private or commercial
yards or lawns. It also includes maintenance of trees and plants whether inside
or outside a building. The term does not include clearing land for buildings,
power line rights-of-way, pipeline rights-of-way, or maintenance on land
belonging to a governmental entity when the service is required by the
governmental entity.

You must collect tax from your customers on the total amount billed for the
taxable services. You must remit the tax due on these sales to this agency when
filing your sales tax return. You must pay tax on equipment, tools, and other
items that you use to provide the service. However, you may issue a resale
certificate instead of paying the tax when purchasing tangible personal
property if the care, custody, and control will be transferred to your customer
during the service. For example, you may purchase fertilizer, plants, potting
soil, and bark chips for resale because you will transfer the care, custody,
and control of these items to your customers when you perform the service.

Transactions that are taxable may be sold to exempt organizations, such as lawn
mowing for a church. In these instances you may accept a properly completed
exemption certificate from the exempt entity in place of the tax. You may also
sell to other businesses that are selling your services to their customers; on
these transactions you may accept the businesses' properly completed resale
certificate(s) in place of the tax. Neither the sale to the church nor the sale
to the other business for resale should be included in your taxable sales data
on your sales tax return.

Landscaping and lawn or yard maintenance do not include hardscape activities
such as the addition of sprinkler systems, retaining walls, ponds, pools, or
fences, or other construction activities nor professional services provided by
landscape designers or landscape architects such as consultation, research,
preparation of general or specific design or detail plans, studies,
specifications, or supervision, or any other professional services or functions
within the definition of the practice of engineering or architecture. When
providing services classified as hardscape activities, you are improving
realty.

When improving realty by installing new systems you are operating as a
contractor. You may operate as a lump-sum contractor and pay tax on everything;
the lump-sum charge to the customer is not taxed. Or, you may operate as a
separated contractor by separately stating the incorporated materials charge
from the labor charge. You will collect tax from your customer on the
incorporated materials charge; the new construction labor is not taxed. You may
purchase these incorporated materials for resale. Again, you pay tax on all
taxable items used to perform the work.

When improving realty by repairing or remodeling an existing irrigation or
other hardscape system that is a nonresidential (commercial) improvement to
realty, the total charge to your customer is taxed as nonresidential repair or
remodeling. On these jobs, you are a taxable service provider and may purchase
the incorporated materials for resale; you must pay tax on items used to
perform the services. Irrigation systems for agricultural purposes (new
construction and certain repairs) may qualify for certain exemptions; please
call or write for more information about agricultural exemptions as needed.

There is an exclusion from the taxable service category when real property
services are performed for contractors building new structures to be used as a
residence. You should presume your services are taxable until the contractor
gives you documentation (written contract, exemption certificate, etc.) stating
the landscaping or other real property services are being purchased as part of
a new construction contract to build a new structure to be used as a residence.
Under these contracts, you are operating as a new construction contractor.

This opinion is based on the facts presented. Additional or different facts
may yield different results.

You may call me toll free 1-800-531-5441, extension 5-9787, if you have any
questions or need more information. The direct line is 512/305-9787. You may
also write to Tax Policy Division, Comptroller of Public Accounts.

Sincerely,

Philip Knisely
Tax Policy Division