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By Ed Ben, Senior Director, State & Local Tax | July 7, 2020


Arkansas has recently reminded taxpayers that the services of cleaning or janitorial work are subject to taxation by issuing legal opinion 20200327 (June 11, 2020)This opinion states that COVID-19 cleaning and disinfecting services are subject to Arkansas sales and use tax (Ark. Code Ann. § 26-52-301(3)(D)(i)(b)). The opinion further clarifies that wiping surfaces and using a disinfectant fogger are within the definition of what the state considers a taxable cleaning service. According to Arkansas Regulation GR-9.4(A), “cleaning services are defined as services to rid the interior or exterior of any building, dwelling, or other structure of dirt, impurities, or extraneous matter.” 

Additionally, we want to remind taxpayers that Texas also taxes building and grounds cleaning, janitorial, and custodial services as real property services (Tex. Tax Code Ann. § 151.0048(a)(4)). To date, Texas has not issued specific guidance relating to COVID-19 sanitization services. However, Texas Regulation 34 TAC 3.356(a)(7), defines taxable cleaning services as “the activities of keeping the inside and outside premises of a building clean, orderly, and functional, including performing minor adjustments, maintenance, or repairs.” 


There have been many cases in Texas surrounding sanitization services provided to the food processing industry. Decision, Hearing No. 28,577 dated September 25, 1992, concluded that Texas sales tax should not be levied upon sanitization services provided to sanitize meat cutting equipment with highly pressurized hot water and caustic sanitizing agents. In this decision, the administrative law judge ruled that since the meat processing equipment must be cleaned under USDA regulation and the charges for the sanitization services were separately stated from otherwise taxable janitorial service charges, that the sanitizing charges were not taxable. This decision has been cited favorably in later decisions related to the food processing industry.   

It remains to be seen whether COVID-19 related sanitization services will be considered exempt in the broader sense in Texas. For now, such charges should be considered taxable cleaning charges unless notice to the contrary is published by the State Comptroller’s office. Taxpayers may want to consider separately itemizing such taxable charges on cleaning services invoices.  A separately stated charge on which tax was imposed will make it easier to prove entitlement to exemption and file for future refunds if exempt status is accorded to such services by the Texas Comptroller at a future date. 

Altus Group’s Transaction Tax Team will be closely monitoring ongoing Texas guidance for any additional information regarding coronavirus cleaning. 


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