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[NJ] Can a contractor avoid sales tax on a capital improvement with the right certificate?
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I live in NJ. I do fireplaces, which are considered a capital improvement. If I get an ST-8, do I still have to send in sales tax to the state even if I did not collect it?
I understand that navigating sales tax regulations can be confusing. Have you already obtained your ST-8 form for your business?
Yes.
Are you currently registered to collect sales tax in New Jersey?
Yes.
Is there anything else the lawyer should know before I connect you? Rest assured they’ll be able to help with your sales tax question.
No.
Hey there! Welcome to our service. I’m Jessica, an attorney with many years of experience. I understand you’re dealing with a situation involving sales tax and capital improvement in New Jersey. Have you considered any legal actions to address this issue?
If it is a capital improvement, I can issue an ST-8 and not charge the customer sales tax. Do I still need to pay the sales tax to NJ?
Got it, thanks for sharing that. Just to clarify, have you been collecting sales tax from your customers for any of your services or products?
Why does that matter?
If I’m putting in a new fireplace and it is a capital improvement, do I need to pay the sales tax to NJ even though I collected an ST-8 from the customer and did not collect sales tax?
If you are a NJ contractor performing a capital improvement (like installing a new fireplace) and have a properly completed Form ST-8 from the homeowner, you do not collect sales tax on labor or materials, and you do not remit sales tax to the state on that job ([N.J.S.A. 54:32B-3]; N.J.A.C. 18:24-5.7 and 5.16). However, you must pay sales tax to your suppliers when you purchase the materials (N.J.A.C. 18:24-5.3; see also the Division of Taxation’s guide, Sales Tax and Home Improvements). Thank you.
That’s amazing.
Have a good day.
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