New Jersey homeowners and anyone else contracting to improve their property could be hit by an expanded definition of the sales tax to include “landscaping services.” A state trade group, the New Jersey Alliance for Environmental Concerns, is mounting a movement to retain its current status under a 2004 law.
These services are currently taxed under Treasury rules as a maintenance activity. Landscape construction services have been considered a capital improvement and exempted from sales taxes for decades, just as other home improvements such as the installation of swimming pools, patios, and roof replacements, among others.
In 2004, the New Jersey legislature determined through the “Home Improvement Contractors Registration Act” that landscape contractors are “Home Improvement Contractors” and subject to the registration requirements of the act. “What has changed since the passage of this act?” asks Nancy Sadlon, a spokeswomen for the group. “Why has landscaping been singled out as a luxury and proposed for taxation?
The New Jersey Alliance for Environmental Concerns represents elements of the landscape and turf care industries. It calls the potential extension of the sales tax “discriminatory and a detriment to the landscape construction industry” and has launched a campaign to contact members of the Assembly Appropriations Committees to oppose a sales tax increase of 6 to 7 percent on the services they provide homeowners and others.
Nancy Sadlon, a spokeswoman for the Alliance, noted that, “Landscape site work is required by municipalities and state building codes prior to the issuance of a certificate of occupancy. It is not a luxury and, indeed, is required to control runoff and other factors to protect the environment.”
“According to Money magazine, landscaping can add 15% to a home’s value,” notes Sadlon. Any site improvement, particularly prior to the sale of a home can significantly bring a recovery value of 100% to 200% at selling time, according to the magazine.
“There are many environmental benefits as well,” said Ms. Sadlon. “Landscaping can reduce air conditioning costs by up to 50 percent by shading the windows and walls of a home and trees can reduce bothersome noise up to 50 percent. A single tree can remove up to 26 pounds of carbon dioxide from the air every year and releases about 13 pounds of oxygen, enough for a family of four, on a daily basis.”
“Landscaping also provides food and habitat for wildlife, controls storm water runoff, and allows soil to absorb water, while recharging aquifers,” says the agronomist Ray Buckwalter, an Alliance member and spokesperson.
Buckwalter warned that the proposed sales tax would have a detrimental effect on legitimate lawn care and landscape businesses in New Jersey, “encouraging unscrupulous contractors to accept cash payments,” undercutting a responsible bid by 6 percent in this manner.
“The proposed sales tax could provide unfair advantages to other contractors, who do the same type of work as landscape contractors,” Buckwalter says. “For example, if a landscape contractor installs a masonry wall as part of a landscape site work project, the wall would be subject to a sales tax, while if a home improvement or a mason contractor installs the same wall, it would be exempt from taxation.”
The Alliance is hopeful that legislators will recognize the inherent inequities of the proposed extension of a sale