Now: prime contracting; lawn maintenance;
exemption
HB 2242 clarifies lawn maintenance services are not prime contracting activities.
In May 2001, DOR released Arizona Transaction Privilege Tax Ruling TPR 01-1 that provided interpretive guidance to clarify lawn maintenance activities that constitute nontaxable service activities, taxable retail sales and taxable prime contracting activities. This ruling stated that certain maintenance activities are interpreted as taxable contract activities, such as replacing seasonal flowers or broken sprinkler heads.
The bill proposes to statutorily provide further clarity on these activities.
· Clarifies that the gross sales or gross proceeds of income received from lawn maintenance services are not subject to the prime contracting classification if the contract does not include landscaping activities. Defines lawn maintenance service to include repairing sprinkler heads or drip irrigation heads, replacing seasonal flowers and refreshing gravel.
· Clarifies that the gross sales or gross proceeds of income received from landscaping activities are subject to the prime contracting classification and defines landscaping activities. These activities include repairing sprinkler or watering systems and installing gravel or boulders, along with planting and removing trees.
· Contains an effective date of September 1, 2002.
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45th Legislature
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Second Regular Session 2 June
3, 2002
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