Arkansas—Sales and Use Tax: Taxpayer’s Landscaping Services for New Construction Properly Subject to Sales Tax

ARKANSAS: A taxpayer’s landscaping services for new construction projects was properly subject to Arkansas sales and use tax assessment as under Arkansas law landscaping services are subject to tax regardless of whether they are performed on residential or commercial property and regardless of whether or not the service is provided in connection with new construction.

In this matter, the taxpayer performed landscape services but did not pay sales and use tax on the services it rendered. The taxpayer argued that the landscaping services furnished for new construction projects were not taxable. However, the taxpayer failed to prove that the landscaping services furnished during the audit period in connection with new construction were exempt for sales tax.

It was noted that under Arkansas law, all landscaping services performed on residential or commercial property provided in connection with new or exiting construction are subject to tax.

Although, the taxpayer was properly subject to interest on assessment, the taxpayer was not subject to penalty as the taxpayer’s failure to file sales tax reports was due to reasonable cause and not willful neglect.

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