Everyday Cleaning Services May Be Taxable. Here’s How States Handle It.
Cleaning and janitorial services feel like routine operating expenses, but in several states, the tax rules tied to this work are more complicated than many businesses expect. Light office cleaning, dusting, window washing, or disinfecting services can trigger sales tax obligations depending on where the service is performed. For multi-location businesses or companies that rely on outside cleaning services, knowing which states tax these services is an important part of accurate sales and use tax compliance.
Many businesses are surprised to learn that something as simple as routine cleaning can be taxable. The rules vary widely, and the terminology states use to describe “cleaning,” “maintenance,” or “janitorial services” is not always consistent. Most states take a clear stance, but their definitions can be broad enough to include services that feel minor or incidental. As always, these rules can shift over time, and businesses should review current guidance or talk with a professional before filing.
Unfortunately, there is no “One Size Fits All” answer.
States vary in how they define things and how they apply taxes. Below are excerpts from each state’s publication that are relevant to this topic. (source documents are linked at the end of the article). For additional information and guidance, reach out to a Brady Martz team member.
- Iowa: The Department makes every attempt to keep this list current. However, please reference Iowa Code section 423.2(6) for the official listing of taxable services in Iowa
- Janitorial and building maintenance or cleaning (non-residential only)
- Minnesota: Building cleaning and maintenance, disinfecting, and exterminating services are taxable. Building cleaning and maintenance includes both interior and exterior cleaning of commercial and residential buildings, homes, and apartments to keep them in good upkeep or condition. It does not include repairs to buildings
- Nebraska: Retailers providing building cleaning and maintenance services must hold a Nebraska sales and use tax permit and collect the Nebraska and applicable local (city) sales tax on charges for these services performed in Nebraska
- South Dakota: Examples of taxable services are:
- Accountant
- Business consulting
- Janitorial services
- Texas: Tax is due on the charge to clean a home, office, warehouse, garage, restaurant, or any other building, or a swimming pool.
Some states provide narrow exemptions or exclude cleaning from their taxable list.
- North Carolina: Cleaning Real Property
- Janitorial services –Exempt
- Power wash real property — Exempt
- Window cleaning –Exempt
Why This Matters for Businesses
Service providers may be required to register, collect, and remit sales tax. Customers may owe use tax if the vendor does not charge it when required. Because cleaning is such a common service, missteps often accumulate over time.
A quick review of current vendors and contracts can help confirm whether tax should be charged. If your company provides cleaning or maintenance services, it may be time to confirm whether registration is required in your operating states.
If you’d like help evaluating how these rules apply to your business, the Brady Martz team is always ready to talk.
Sources:
Iowa Department of Revenue, Iowa Sales and Use Tax: Taxable Services.
https://revenue.iowa.gov/taxes/tax-guidance/sales-use-excise-tax/iowa-sales-and-use-tax-taxable-services
Minnesota Department of Revenue, Sales Tax: Building Cleaning and Maintenance Services.
https://www.revenue.state.mn.us/guide/sales-building-cleaning-and-maintenance
North Carolina Department of Revenue, Important Notice: Additional Information Regarding Real Property Contracts and Retail Sales of Repair Services.
Services to Real Property Taxability Chart | NCDOR
Nebraska Department of Revenue, Information Guide 6-401: Contractors and Repair Services.
https://revenue.nebraska.gov/sites/default/files/doc/info/6-401.pdf
South Dakota Department of Revenue, Tax Facts for Dentists.
https://dor.sd.gov/media/vusbwknx/dentists.pdf
Texas Comptroller of Public Accounts, Publication 94-111: Taxable Services.
https://comptroller.texas.gov/taxes/publications/94-111.php
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