Personal and professional services

From the 2024 DOR Tax Exemption Study

82.04.050 - Personal and professional services Description The retail sales tax originally applied only to the sale of tangible personal property and thus, by definition, excluded services from the tax base. Since 1935, some services were added to the tax base, including services to tangible personal property (e.g., repair services) in 1939; construction in 1941; rental of tangible personal property in 1959; certain amusement and recreation activities in 1961 and 2015; and landscape maintenance, physical fitness and certain miscellaneous personal services in 1993 and 2015. Although, technically, the remaining personal and professional services are not "exempt" because they were never in the tax base, there has been some interest in the amount of revenue represented by these activities. Therefore, they are included in this report. Purpose The primary reasons services were excluded from retail sales tax may have included these: - To maintain simplicity by taxing only one property class, i.e., tangible goods. - To conform to the practice of other states at the time. - To minimize tax administration costs by not requiring service providers to collect the tax. - A recognition that servi