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Message |
    
peteglider
Citizen
Username: Peteglider
Post Number: 2189
Registered: 8-2002
| | Posted on Wednesday, August 30, 2006 - 5:07 pm: | 
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In June, I got a price for new kitchen counters, including install.
The work is about to be done -- now there is tax on the job!
How can I doublecheck this?
Pete |
Michael K. McKell
Citizen
Username: Mckellconst
Post Number: 114
Registered: 5-2006
| | Posted on Wednesday, August 30, 2006 - 5:28 pm: |
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Materials are taxable. |
oots
Citizen
Username: Oots
Post Number: 461
Registered: 6-2001
| | Posted on Wednesday, August 30, 2006 - 5:36 pm: |
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mike
technically-a home improvement is not taxable to the homeowner. The materials are taxable to the contractor and he should include the tax as part of his overall cost when he quotes the job. The tax should not be separately stated to the homeowner. If the tax is added later-I would not pay it-unless they discussed it beforehand.
this is not anything new.
oots |
george H
Citizen
Username: Georgieboy
Post Number: 322
Registered: 8-2005
| | Posted on Wednesday, August 30, 2006 - 5:38 pm: |
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I was under the impression that labor on capital improvements,ie;any real improvement that becomes a permanent part of the property,were exempt from tax.There are certain definitions such as,new cabinets,exempt,replacement of cabinet doors,not exempt.From what I remember from when I had Corian counters installed 5 yrs. ago,the labor was exempt.Like Michael says,all materials are taxable. |
Shanabana
Citizen
Username: Shanabana
Post Number: 1049
Registered: 10-2005
| | Posted on Wednesday, August 30, 2006 - 5:58 pm: |
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Yes. But I think some contractors are confused about this--yours might be one of those. Most don't get their stuff wholesale, and so already pay the tax on materials at the time of purchase. I don't think the "service" shouldn't be taxable. |
Shanabana
Citizen
Username: Shanabana
Post Number: 1050
Registered: 10-2005
| | Posted on Wednesday, August 30, 2006 - 6:08 pm: |
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But maybe if the work is being done by a company that also supplies or fabricates the stuff, as opposed to a home improvement contractor, then taxes would apply? |
SOrising
Citizen
Username: Sorising
Post Number: 743
Registered: 2-2006
| | Posted on Wednesday, August 30, 2006 - 6:10 pm: |
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Does the no-tax-for-labor-on-home-improvements rule apply to routine repairs like plumbing, appliances, etc? |
Sherri De Rose
Citizen
Username: Honeydo
Post Number: 418
Registered: 11-2005
| | Posted on Wednesday, August 30, 2006 - 6:20 pm: |
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I recently received a notice from the State of NJ listing all the new services that will be taxed under the new sales and use tax: I.E.
Space for Storage, Massage Services, Tattooing, Limo Services, Membership Fees, Parking, Pre-written computer software delivered electronically, dry cleaning etc., installing floor coverings, landscaping services, delivery charges, and the list goes on and on.
They direct you to look at their website www.state.nj.us/treasury/taxation/
What we have been doing is anything that is not capital improvement must have a 7% sales tax added. This includes materials (that have been purchased by the contractor and he has paid tax on) and all labor. We pay our taxes every quarter. We do not keep this money. It goes to the State of NJ.
If it is capital improvement then we have our clients fill out Sales Tax form
ST-8 Certificate of Capital Improvement.
Hope this answers everyones questions. |
JC
Citizen
Username: Demolitionman
Post Number: 56
Registered: 6-2006
| | Posted on Wednesday, August 30, 2006 - 7:39 pm: |
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www.state.nj.us/treasury/taxation/pdf/other_forms/sales/st8.pdf |
Shanabana
Citizen
Username: Shanabana
Post Number: 1051
Registered: 10-2005
| | Posted on Wednesday, August 30, 2006 - 7:58 pm: |
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Ok, so kitchen countertops aren't on the list of capital improvements, however, the form states clearly that it is listing only "examples of capital improvments". You'll need to contact the Division of Taxation in order to ascertain whether your counters are or not. |
Sherri De Rose
Citizen
Username: Honeydo
Post Number: 420
Registered: 11-2005
| | Posted on Thursday, August 31, 2006 - 8:01 am: |
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I don't believe specifically a counter would qualify. Only if someone were doing your entire kitchen remodel would it be subject to capital improvement. |
george H
Citizen
Username: Georgieboy
Post Number: 323
Registered: 8-2005
| | Posted on Thursday, August 31, 2006 - 8:52 am: |
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You did'nt specify the type of counter,but I think that granite or Corian would increase the value of your house,at least the amount they cost you and would thus be considered a capital imp.They also are a permanent part of the property and meet that standard. |
Michael K. McKell
Citizen
Username: Mckellconst
Post Number: 116
Registered: 5-2006
| | Posted on Thursday, August 31, 2006 - 9:10 am: |
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All of my quotes and/or contracts state that all applicable taxes are included. |
Shanabana
Citizen
Username: Shanabana
Post Number: 1055
Registered: 10-2005
| | Posted on Thursday, August 31, 2006 - 9:50 am: |
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Sherri, it lists individual items (like cabinet doors) in a kitchen, not simply the whole kitchen remodel. |
oots
Citizen
Username: Oots
Post Number: 462
Registered: 6-2001
| | Posted on Thursday, August 31, 2006 - 10:58 am: |
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sherri:
all "repairs" are subject to sales tax on labor and material. You do not have to pay sales tax on materials you purchase when used on a repair job since you are charging tax to the homeowner on the entire sale.
oots |
Sherri De Rose
Citizen
Username: Honeydo
Post Number: 422
Registered: 11-2005
| | Posted on Thursday, August 31, 2006 - 11:17 am: |
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Oots, yes and thanks. When we pay our sales tax we do deduct the receipts for materials purchased for the job. There is so much to know and reams of paperwork it can get very confusing. |
oots
Citizen
Username: Oots
Post Number: 463
Registered: 6-2001
| | Posted on Thursday, August 31, 2006 - 11:30 am: |
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also-dry cleaning of clothing is still exempt from tax. what is now taxable is dry cleaning of linens & drapes etc.
oots |
Jgberkeley
Citizen
Username: Jgberkeley
Post Number: 4648
Registered: 5-2001
| | Posted on Sunday, September 3, 2006 - 11:58 am: |
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oots,
As a licensed Home Improvement Contractor, does this mean that I have to file a quarterly ST-50 or a monthly ST-51 form and pay sales tax collected on my gross sales, collected?
Jgberkeley |
Sherri De Rose
Citizen
Username: Honeydo
Post Number: 432
Registered: 11-2005
| | Posted on Sunday, September 3, 2006 - 2:56 pm: |
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You will have to reconfirm this but as I understand it is that if your sales tax liability is under $500.00 you may pay it quarterly, if it is over $500.00 due then it must be paid monthly. You don't pay sales tax on your gross sales, you take your gross sales then deduct the costs of materials from that figure and pay sales tax on that figure.
If this is different, then I would appreciate any input to correct it. |
TomR
Citizen
Username: Tomr
Post Number: 1290
Registered: 6-2001
| | Posted on Sunday, September 3, 2006 - 4:30 pm: |
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Do contractors pay sales tax when they purchase materials for a job?
TomR |
Darren Say Grrrrrrrr
Citizen
Username: Darrensager
Post Number: 540
Registered: 11-2001
| | Posted on Sunday, September 3, 2006 - 4:45 pm: |
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Yes. |
Dennis J O'Neill
Citizen
Username: Plungy
Post Number: 84
Registered: 6-2005
| | Posted on Sunday, September 3, 2006 - 5:25 pm: |
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Just got a letter from the state with the changes. The only two that apply to home improvemnent have to do with floor covering and landscaping no longer being exempt capital improvements. |
oots
Citizen
Username: Oots
Post Number: 467
Registered: 6-2001
| | Posted on Sunday, September 3, 2006 - 7:05 pm: |
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George,
you can file quarterly if under $500 per month on sales taxes that you may be chrging your customers. If over $500 per month then you must pay monthly.
Dennis-the discussion regarding home improv contractors is not about new laws.
oots |
TomR
Citizen
Username: Tomr
Post Number: 1291
Registered: 6-2001
| | Posted on Sunday, September 3, 2006 - 10:51 pm: |
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So if one gets a proposal from a contractor which includes sales tax for the entire job (materials and labor) it would seem that the contractor is trying to rip the customer off.
I had been under the impression that sales tax was only chargeable to the end user.
I fear I'm misunderstanding something here.
TomR |
oots
Citizen
Username: Oots
Post Number: 468
Registered: 6-2001
| | Posted on Monday, September 4, 2006 - 12:12 pm: |
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tomr
if the propsal is for a "repair" the entire job is subject to sales tax-materials & labor.
if the job is a "capital improvement" then the job is not subject to tax. the contractor must pay sales tax on the materials he uses on the job from wherever he purchases them from. The contractor should bill/propose to you without any mention of sales tax. if the job is a capital improvement-you should fill out a nj st-8 form-cetrificate of capital improvement and give it to the contractor. most contractors should have this form for you or you can download from the st of nj website.
this can be a pretty confusing issue and many contractors mess it up.
pl me if you need further details.
oots |
oots
Citizen
Username: Oots
Post Number: 469
Registered: 6-2001
| | Posted on Monday, September 4, 2006 - 12:19 pm: |
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sherri:
you only pay sales tax to nj based on what sales are taxable vs non taxable. you take your gross sales and subtract your non taxable sales to get taxable sales. the nj sales tax form has nothing to do with materials. if you buy materials without paying the sales taxes if applicable, you can pay "use tax" on the form st-50 that you file qtrly.
pl me if you need help
oots |
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