Charges for Maintenance Taxable as Part of Lease Proceeds

Thursday, September 25th, 2014

A line of rented portable toilets.

A Louisiana Court of Appeals ("Court") recently ruled that the charge for cleaning rented portable toilets was taxable as part of the rental of the toilets.

The taxpayer provided waste management services, including leasing portable toilets and holding tanks. The taxpayer offered cleaning and sanitation services for these leased items. Customers were not required to purchase these services, but customers who chose not to purchase cleaning and sanitation services had to pay a higher rental fee.

The City of Baton Rouge taxes sales and leases of tangible personal property. It does not tax sales of cleaning services. The city sales tax applies to the gross proceeds of a sale or lease.

The Court ruled that the taxpayer's charges for its services were part of the gross proceeds from the lease of tangible personal property. The essence of the transaction between the taxpayer and its customers was a taxable lease. The charge for services could not be separated from the charge for the lease. The charge for services was therefore taxable.

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TTR has a website that companies subscribe to and use daily. This website provides a list of everything that can be bought or sold in the U.S. It provides simple answers to whether buying or selling these items is taxable (subject to a sales tax or other tax), and it provides all the legal authority to support these tax answers.

TTR likes to keep things simple and fun, which is why it has great people who provide help to clients on any support questions they have about transaction tax issues.

Please visit TTR on the web at or call 866.578.8193.

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