Personal and professional services

From the 2024 DOR Tax Exemption Study

Home Education Industry Guides Interior Decorators, Designers, & Consultants Guide Miscellaneous Topics Print Miscellaneous topics Improving real property – services provided in respect to construction When you provide both design services and perform actual improvements to the real property, the taxability of the activity is determined by the predominant activity performed for the entire contract. If the predominant activity under the contract is design services, then the income earned from the contract is subject to B&O tax under the Service and Other Activities classification. If the predominant activity under the contract is improving real property, then the income earned from the contract is subject to B&O tax under the Retailing classification. In addition, you must collect sales tax from your client on the entire contract amount. The term “improving real property” means decorating, refurbishing, renovating, remodeling, or other activities that change or alter real property. An improvement activity is presumed to be the predominant activity over design services if, at the time the design services are performed, the parties contemplate that the designer will also be responsibl