Does a self-employed lawn mowing person have to charge sales tax if they only make a small amount of money and don't sell materials?

Plain-English summary

Someone wrote to the Comptroller's tax.help service on behalf of a 62-year-old man, asking why he had to charge sales tax on his mowing service when his price included no materials or supplies — just labor. The Comptroller explained that this isn't about materials at all: Tax Code § 151.0048 defines "real property services" to include the care and maintenance of lawns and yards, and § 151.0101(11) makes real property services taxable. That means a mowing service must collect tax from customers on the labor charge itself, with or without any materials in the price.

But there's a narrow small-business carve-out: Tax Code § 151.347 exempts lawn and yard maintenance services performed by a self-employed individual whose total receipts from that work, over the most recent four calendar quarters, are less than $5,000. Applying that to the facts: if the 62-year-old was self-employed and earned under $5,000 from mowing between January 1 and December 31, 2000, his services are exempt and he owes no tax. If he earned over $5,000 in that period, or isn't self-employed (e.g., he works for a lawn care company as an employee), his mowing services are taxable regardless of how small any individual job is.

What this means for you

Individual, self-employed lawn care providers

Track your total receipts from lawn and yard maintenance over a rolling four-calendar-quarter window. If you stay under $5,000, you don't need to collect or remit sales tax on your services. Cross $5,000, and every dollar of your mowing/yard maintenance services becomes taxable going forward — this isn't a "first $5,000 free" exemption, it's an all-or-nothing threshold test.

Larger lawn care and landscaping companies

The § 151.347 exemption is specifically for self-employed individuals below the threshold — it does not extend to companies, partnerships, or employees of a lawn care business. If you're not a sole self-employed operator under $5,000 in receipts, charge tax on your yard maintenance services regardless of whether you bill separately for materials.

Accountants and tax professionals

This is a clean example of Texas's real-property-services tax base reaching pure labor with no materials component, tempered by a specific small-self-employed-operator exemption. Confirm your client's self-employment status and precise four-quarter receipts total before advising on exemption eligibility.

Common questions

Q: Is lawn mowing taxable in Texas even if I don't sell any materials?
A: Yes — Tax Code § 151.0048 and § 151.0101(11) make lawn and yard maintenance a taxable real property service regardless of whether materials are included in the charge.

Q: Is there an exemption for small operators?
A: Yes. Tax Code § 151.347 exempts a self-employed individual whose total lawn/yard maintenance receipts over the most recent four calendar quarters are under $5,000.

Q: What happens once I cross $5,000 in receipts?
A: Your lawn and yard maintenance services become taxable — the exemption is an eligibility threshold, not a partial exclusion of the first $5,000.

Q: Does this exemption apply to a lawn care company, not just an individual?
A: No — § 151.347 is limited to a self-employed individual meeting the receipts threshold; it doesn't extend to businesses or employees.

Q: Can I rely on this letter for my own situation?
A: Not directly. This is a Texas STAR letter ruling binding on the Comptroller only for the person it addressed (34 Tex. Admin. Code Rules 3.1, 3.10). Confirm your own receipts and employment status with a tax professional.

Citations and references

Statutes and rules:

• Tex. Tax Code § 151.0048 (real property services include lawn and yard care)
• Tex. Tax Code § 151.0101(11) (real property services are taxable services)
• Tex. Tax Code § 151.347 (exemption for self-employed lawn/yard maintenance under $5,000 in receipts)

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/200102071L

Original ruling text

February 21, 2001

Dear **:

Thank you for using tax.help to inquire about the taxability of a mowing
service. You asked why a 62-year-old man is required to charge sales tax on
his mowing service if no materials or supplies are included in the price for
the service.

Response: Texas Tax Code Section 151.0048 defines a real property service to
include the care and maintenance of lawns and yards. Section 151.0101(11)
includes real property services as a taxable service. It is because of these
sections in the tax code that a person performing a mowing service must collect
tax from their customer even if no materials or supplies are included in the
charge.

However, Section 151.347 exempts lawn and yard maintenance services performed
by an individual who is self-employed and whose total receipts from lawn and
yard maintenance in the most recent four calendar quarters is less than $5,000.
Therefore, if the individual you referenced is self-employed and made less than
$5,000 from the mowing service from January 1, 2000 through December 31, 2000,
tax is not due on the mowing services he performs. If the person made over
$5,000 or is not self-employed, the mowing services are taxable.

You may view the tax statutes at
. Scroll down and
click on the appropiate statute.

This opinion is based on the facts presented. Other facts, though similar, may
result in different answers.

I hope this information is helpful. I'll be glad to help you if you have
additional questions. You may e-mail your questions to
. My direct telephone line is (512) 475-0037. The
toll-free number is 1-800-531-5441, ext. 5-0037.

Sincerely,

Lindey Osborne
Tax Policy Division