Foreclosed property cleanup

When you perform cleanup services on properties for consumers (e.g., for banks, realtors, or investors), on a foreclosed property, these services are considered special cleanup jobs.

Special cleanup jobs include, but are not limited to: 

  • Removing personal property and debris.
  • Wiping down or replacing fixtures.
  • Vacuuming.
  • Mopping.
  • Disinfecting.
  • Repairing plaster or drywall.
  • Painting.
  • Pressure washing.
  • Roof and gutter cleaning. 

These types of cleanup services are generally subject to retailing business and occupation (B&O) tax and retail sales tax. They do not qualify as “janitorial services” because they go beyond the typical cleaning and caretaking tasks that janitorial businesses usually provide. 

Trash and/or refuse disposal

When you dispose of trash and/or refuse as part of a special cleanup job, you will need to pay solid waste tax to the landfill or transfer station.

If you only pick up trash or refuse that is ready to be disposed of, but do not provide any cleaning services, then you must collect solid waste tax from the customer. You do not pay the solid waste tax to the landfill or transfer station. Instead, you need to report and pay solid waste tax on your excise tax return. For further information, see our solid waste collection/disposal, hazardous waste, and recycling businesses guide.

Equipment, tools, and supplies

You must pay retail sales tax when you buy equipment, tools, and supplies for your janitorial businesses. If the seller does not collect retail sales tax, then you owe use tax on the items purchased. Use tax is reported on the excise tax return.

Purchases of cleaning products

You 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.

Financial businesses, property managers and real estate brokers

If you hire someone to perform the cleanup activities discussed above and that person does not collect sales tax, you must report and pay use tax on those payments. If you are not a registered business, you will file a Consumer Use Tax Return to report the use tax. Filing a consumer use tax return online through My DOR is the fastest way to report your use tax.

Services for properties owned by Fannie Mae and Freddie Mac

Contractors constructing, repairing, decorating, or improving buildings or other structures owned by the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac) are engaged in government contracting. This is true whether there is a property manager or real estate agent acting on behalf of these agencies in hiring the contractor.

Retail sales tax will not apply on these charges. Instead, the contractor performing this work will report their income under the government contracting B&O tax classification. Government contractors owe sales tax or use tax on any materials attached or incorporated into the buildings or structures. For more information, please view the page on government contracting in our Construction Tax Guide.

Charges for retail services such as lawn mowing and trimming are subject to retailing B&O tax. However, they are exempt from retail sales tax when these services are performed for property owned by Fannie Mae or Freddie Mac. If you are hired as a subcontractor, the income would be subject to wholesaling B&O tax. For more information regarding these types of activities, see our Landscapers Guide.

WAC 458-20-17001 – Government contracting—Construction, installations, or improvements to government real property
WAC 458-20-226 – Landscape and horticultural services