When performing the landscaping service of installing trees, shrubs or bushes, the service along with the trees, shrubs, bushes, mulch, fertilizer or chemicals being sold to the customer are part of the landscaper's gross receipts subject to sales tax. The landscape service provider may issue a resale exemption for the purchase of these items since they are received by or remain with the customer after the service is performed. Items consumed by the landscaping service provider performing the service not passed on to the customer such as gasoline, oil or tools are subject to sales tax when purchased by the landscape service provider.
When incorporating fixtures into real property, such as installing a retaining wall or a pond, the landscape service provider is acting as a construction contractor as referenced in 103 KAR 26:070. Separately-stated charges for labor to install or repair these fixtures are not part of the landscaper's gross receipts subject to sales tax. All items consumed in performance of this type of service are subject to sales tax when purchased by the landscape service provider.