Repetitive v. Non-Repetitive Cleaning Services – Wacky Tax Wednesday

There is something immensely satisfying about Spring Cleaning, especially for those of us who live in wet or snowy winter climes. It’s a tradition I’ve enjoyed since childhood, when I was paid ($1 per window!) for removing and washing the storm windows. These days, with no monetary incentives, I scrub the house from top to bottom each spring. As tradition holds, I pay the kids to wash the windows ($1 per window, inside and out).

If I didn’t find Spring Cleaning so darn satisfying I might pay a professional to do it. If I did, and if I lived in Wisconsin, sales tax would apply to some of those charges. However, were I the kind of person who paid to have my house cleaned every week, those charges would be exempt.

So what’s up with that? Is state government trying to incentivize cleaning?

In Washington State, where I actually live, “cleaning services and specialized or non-repetitive cleaning services are subject to retail sales tax.” However, as in Wisconsin, routine and repetitive ‘janitorial services’ are not. Were I to pay cleaners to clean my house on a weekly or monthly basis, sales tax would not apply. Seems like a bargain – except I’d probably clean before the cleaners, thereby rendering their services moot.

But “cleaning services are subject to retail sales tax,” so when would it apply?

According to the Washington State Department of Revenue, taxable specialized or non-repetitive cleaning services include the following:

• Certain construction cleanup services
• Drain clog/cleaning
• Hoarder cleanup
• Specialty cleaning or resealing of grout or tile
• Tap cleaning
  

The Washington State Department of Revenue makes no mention of one-time residential cleaning services such as occur during Spring Cleaning, unless you count having a specialist in to clean your grout. Even window washing services are generally not taxable, because they’re considered to be janitorial services. Only if the cleaning services are for certain specific reasons – after a remodel, or after your bachelor/hoarder great-uncle passes away and you have to deal with his house – are they are subject to Washington sales tax.

Even the taxability of construction cleanup is more complex than it first appears. Generally taxable, it turns out that certain construction clean up services are exempt (see new information recently released by the Washington DOR for specifics).

In Wisconsin, however, taxability is based both on the regularity of the cleaning service and what is being cleaned: tangible personal property or real property. As explained by the Wisconsin Department of Revenue:

• Routine and repetitive janitorial services of both tangible personal property and real property (performed under a single contract or agreement) are exempt from Wisconsin sales tax. This “does not include janitorial services performed for a customer only once”
  [emphasis mine]. Exempt routine and repetitive janitorial include the following:
  • Dusting and cleaning fixtures and furniture
  • Vacuuming carpets
  • Washing windows
• Specialized or non-repetitive cleaning services for real property are exempt and include the following:
  • Washing windows
• Specialized or non-repetitive cleaning services for tangible personal property are taxable and include the following:
  • Carpet cleaning (even though carpets are attached to real property)
  • Upholstery cleaning

Math skills!
The Wisconsin Department of Revenue explains that when both exempt and taxable cleaning services are performed, “the service provider should make a reasonable allocation of the charge between the amount for cleaning tangible personal property (taxable) and the amount for cleaning real property (nontaxable).” A nifty formula is provided for the math-challenged.

Sales tax is complicated, sometimes humorously so. Learn how to simplify it.

photo credit: #37 03-08-2007 via photopin (license)