Construction cleanup services

Construction cleanup services are taxable depending on the type of construction work being done.

Custom construction

Custom prime contracting occurs when a contractor is hired by a landowner (or a person having the rights of ownership, such as a lessee or easement holder) to complete an entire construction project. The custom prime contractor may perform all or a portion of the construction or hire subcontractors to perform all or a portion of the work. Custom prime contractors must charge the landowner retailing business and occupation (B&O) tax and retail sales tax.

If a custom contractor provides a reseller permit to a subcontractor, charges for construction cleanup services are subject to the wholesaling B&O tax. Retail sales tax does not apply under these circumstances.

Speculative building

Speculative building occurs when a person makes improvements on land they own (or has the rights of ownership to).

Charges for construction cleanup services performed for a speculative builder are subject to retailing B&O tax and retail sales tax. A speculative builder cannot use a reseller permit for construction cleanup services.

Janitorial services

The recurring cleanup services that take place after construction cleanup has been performed generally fall within the definition of janitorial services. Janitorial services only maintain the existing condition of the newly constructed or remodeled home/building. Janitorial services do not generally improve or repair a structure. The charges for janitorial services are subject to service and other activities B&O tax and are not subject to retail sales tax.

Purchases of cleaning products

Janitorial businesses must pay sales tax on all the products and tools that you buy for your cleaning services. If your vendor does not charge you sales tax, then you must report use tax on your excise tax return.