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Issue

Many real estate brokers contract to have a sign post business hang the broker’s “for sale” sign on property offered for sale. Is the charge for this service subject to sales tax?

Typical scenario

The real estate brokers typically own their own “for sale” signs and hire a sign post business to setup and take down the signs. The sign post business owns the post on which the broker’s sign will hang. The sign post business will typically dig a hole in the ground and temporarily install a post and hang the broker’s sign on the post. Once the property is sold or the listing contract expires, the sign post business will remove the post and sign and backfill the hole.

Taxability

The Department does not consider the temporary installation of the post to be improving real property. Neither, does the Department consider this to be a rental because dominion or control of the post is not relinquished to the broker.

The Department has determined that charges for this service are not subject to sales tax. The sign post business is subject to the business and occupation (B&O) tax under the service and other activities classification on the income it receives for this service. For further information, see WAC 458-20-204.