Were commercial tree relocation, transplanting, post-transplant maintenance, and arboricultural consulting services taxable in Texas?

Plain-English summary

The requester divided its work into four categories: relocating an owner's mature tree, transplanting a mature tree supplied by the provider, post-transplant maintenance, and professional arboricultural consulting. The consulting category included health diagnosis, tree surveys, management recommendations, construction-protection programs, casualty-loss appraisals, and project inspections.

The Comptroller said all four categories were taxable and the total charge for the services was subject to tax. Services performed outside Texas were not taxable in Texas.

The letter allowed specified inputs to be bought tax-free for resale, including chemicals and fertilizers used in post-transplant maintenance and items incorporated into drawings or reports or otherwise transferred to the client as an integral part of the service. Its separate sentence about fertilizers and mulch refers to categories “(1) and (23),” an apparent source typo that the letter does not resolve.

What this means for you

The historical ruling treated the provider's complete arboricultural service charge as taxable, including professional consultation. It separately addressed resale treatment for certain transferred or incorporated inputs and excluded services rendered outside Texas.

Common questions

Were tree relocation and transplanting taxable? Yes. Both were among the four categories the letter treated as taxable.

Were tree-health diagnosis and management recommendations taxable? Yes. They were included in the taxable consulting category.

Was only the labor portion taxable? No. The letter said the total charge for all services was subject to tax.

Could any inputs be purchased for resale? Yes. The letter expressly allowed resale treatment for specified chemicals, fertilizers, and items incorporated into drawings or reports or transferred as an integral part of the service.

What about work performed outside Texas? The letter said those services were not taxable in Texas.

Citations and references

• No statute or administrative rule is cited in the letter text.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8712L0849B06

Original ruling text

COMPTROLLER OF PUBLIC ACCOUNTS
STATE OF TEXAS
AUSTIN, 78774

BOB BULLOCK
Comptroller December 10, 1987

Dear ****:

Thank you for sending me a copy of your earlier letter which was lost.

Your letter asked the taxability of commercial arboricultural services
which you divided into four categories as follows:

(1) TREE RELOCATION-the mechanized transplanting of an
owner-provided existing mature
(6-9" caliper) tree.

(2) TREE TRANSPLANT SERVICES-the mechanized planting of a mature
(6-9" caliper) tree
supplied by ***, (tree is an incidental part of total
sales).

(3) POST TRANSPLANTING TREE MAINTENANCE SERVICES-a program of labor
and equipment services
designed to reduce transplant-induced tree stresses. These
activities may include pruning,
fertilization, invigoration, insect prevention/control, vegetation
control and irrigation
inspection.

(4) ARBORICULTURAL CONSULTATION SERVICES-this category includes the
following professional
services;

A. Diagnosis of tree health.

B. Tree Survey-native and introduced trees.

C. Tree Management Programs-remedial care and ongoing maintenance
recommendations.

D. Pre and/or Post Construction Tree Protection programs.

E. Casualty Loss Appraisals.

F. Project Inspection services.

All four categories of services you perform are taxable. The fertilizers
and mulching materials you use in category numbers (1) and (23) you may
purchase tax free by issuing a resale certificate. You may also purchase the
chemicals and fertilizers used in category (3) for resale tax free. You may
also purchase for resale tax free all items that are incorporated into the
drawings and reports and may other items that are transferred to the client as
an integral part of the service.

The total charge for all services is subject to tax. Services rendered
out-of-state are not taxable in Texas.

This opinion is based on the facts presented. If there are additional or
different facts, the opinion may change.

If you have any questions or need more information, please call me at
1-800-252-5555 toll free from anywhere in Texas. The regular number is
512/463-4600. You may write me at the Tax Policy Division.

Sincerely,
Tom Soto
Tax Policy Division