Interior designers, decorators and consultants are taxed differently depending on:
- The type of service you provide,
- If you provide or sell tangible personal property,
- The method you use to provide the service or sell the tangible personal property.
Design or consulting services (you are not responsible for the performance of the property improvements)
These services include working with clients to determine their particular needs and décor options and may include:
- Consulting with the clients and others.
- Developing designs or drawings for home or room design, furniture designs, or structure placement.
- Providing a written report, layout design/drawings, or plan to clients.
When design/consultant services are limited to making recommendations for certain types of furniture, paint, fabrics, or artwork, you are merely providing advice to the client on decorating ideas. Income from providing design/consulting services is subject to B&O tax under the Service and Other Activities classification.
Designers and consultants must pay sales tax on their purchases of samples, swatches, decorator magazines and books, or other materials used in the course of providing their services.
Example 1: Julie is a color consultant and interior designer. She works with clients to determine interior and exterior paint color schemes. Julie also assists clients in determining where to place furniture and other interior and exterior elements. However, she does not purchase any paint, furniture, or other items for her clients. Julie’s services are limited to consulting only.
Julie’s income is subject to B&O tax under the Service and Other Activities classification.
Example 2: As a designer, Tom meets with clients and advises them on plant choices, landscaping options, and garden design for the exterior of a home. He develops and creates a customized plan for each client, specific to the property. Tom does not sell plants or landscaping tools to clients, nor does he provide landscaping services.
Tom’s landscape design income is subject to B&O tax under the Service and Other Activities classification.