No one likes paperwork, but ST-8 forms are a helpful bit that can benefit you when you’re making improvements on your property in New Jersey.
What Is An ST-8 Form?
An ST-8 form is a sales tax form in the state of New Jersey for the certificate of exempt capital improvements.
New Jersey Sales Taxes do not treat all work on your property the same way. When you have work done on your real property (building or land) it can fall into one of three categories:
- Capital Improvement
- Maintenance Service
The Sales Tax rules differ for each of these properties and the ST-8 form helps you understand whether or not you need to pay sales tax depending on the type of work being done.
Before we get into what you have to pay sales tax on and what you don’t let’s define a few terms we’ll use throughout this post.
The first term you need to know is “real property.”
Real property: Land and buildings and any property permanently attached to the land and/or buildings in such a way that its removal would result in substantial damage to the real property.
The next term you need to know is tangible “personal property.” What is tangible “personal property”?
Tangible personal property: Property that is not classified as real property. It has physical mass and be touch touched (think automobiles, furniture, tools, and appliances).
The final definition we’ll go over in this section is “contractors.”
Contractors: Individual or business entity engaged in the business of improving, altering, or repairing land, buildings, or other real property of others. This term also includes those who manufacture, sell, and install items that become part of real property, like manufacturers and sellers of kitchen cabinets.
Understanding What Work Is Exempt From NJ Sales Tax
Capital improvements are the only type of work on real property that is exempt from New Jersey Sales Tax. The second two options – repairs and maintenance services – are not exempt from New Jersey Sales Tax.
It is also important to note that any DIY improvements or work that you do yourself is not exempt. So if you go and buy supplies at a store or online you will still have to pay taxes on them even if you use them to permanently improve your home.
You can always still build or stain your own fence, you just have to pay sales tax on the materials you purchase.
What Are Repairs? (Not Exempt)
First, let’s go over repairs. Repairs are pretty straight forward.
When we talk about repairs to real property, we’re talking about any work restores the property to working condition. Common repairs that are not exempt from New Jersey sales tax and do not need you to fill out a ST-8 form include:
- Patching driveway potholes
- Fixing loose bath tiles
- Fixing faulty electrical wires
- Repairing gutters
- Fixing faulty plumbing
- Fixing cracked patio
- Pointing bricks
- Replacing a torn screen
- Fixing basement leaks
- Fixing a leaky roof
What Are Maintenance Services? (Not Exempt)
Maintenance Services are anything that maintains the value of a property instead of improving the value of the property. Think about any type of service you pay for month after month. Common maintenance services that are not exempt from sales tax in New Jersey include:
- Mowing lawn
- Trimming trees
- Repainting interior or exterior
- Snow shoveling
- Power washing exterior of house
What Are Capital Improvements? (Exempt… Most of the Time)
“Capital improvement” is a term we use to describe the installation of tangible personal property that increases the capital value or useful life of the real property (land or buildings). Capital improvements are very different from maintenance or repairs. When it comes to capital improvements, the item(s) installed must be permanently attached to the real property.
What does it matter if your work is a capital improvement, repair, or maintenance service? Capital improvements are exempt from New Jersey Sales Tax.
Here is a list of some examples of exempt capital improvements that real property owners do not have to pay New Jersey Sales Tax on:
- All new construction
- Porch enclosure
- New siding
- New heating system
- Storm doors and windows
- New kitchen cabinets
- New electrical outlets
- Paving driveway
- New doors
- New central air conditioner
- Flagpole (in concrete)
- Clearing land for construction
- New roof
- New attic ventilation fan
- New gutters
- New fence
- Electronic garage door opener
- New elevators
- Barbecue pit
- New hot water heater
- Solar energy window film
- New door locks
- In-ground swimming pool
- New bathroom fixtures
- New awnings
- New tiled bath
- New deck
- Shed/gazebo (cement footings)
- Initial painting of new construction system
- Underground water sprinkler system
Exceptions To The Rule
As with everything else in life, their are exceptions to the rule. That means doing some capital improvements actually will actually cost you NJ Sales Tax. Capital improvements that are not exempt from tax include certain landscaping services, flooring covering installations, and hard-wired alarm or security installations.
All of the following services will incur NJ Sales Tax:
- Planting shrubbery, trees, hedges, plants, etc.
- Seeding, sodding, grass plugging of new lawn
- Clearing and filling land associated with seeding, sodding, etc. of new lawn or planting shrubbery, trees, etc., including tree and/or stump removal
- Installing hard-wired security, burglar, or fire systems
- Installation carpeting and other flooring
Filling Out the ST-8 Form
Paperwork is never really fun, but form ST-8 is pretty short and straightforward. Here are some of the most common questions about filling out the ST-8 Forms and their answers.
Who Fills Out the ST- 8 Form?
There are two parties responsible for filling out the ST-8 form are the property owner and the contractor (us). The contractor fills out the top part including their name, address, the scope of the work, and the price. On the other hand, the real property owner fills out their name, address, and signature.
What goes on the ST-8 Form?
Both contractors and property owners alike just fill out the first page of the ST-8 form together. There are six main things that go on the ST-8 form:
- Name and address of the contractor
- The nature of the work
- The total amount of the contract
- Contractor’s signature/certification
- Name and address of the property owner
- Signature of the property owner
When you choose Artistic Fence to install your fence at your real property, we fill out everything for you besides the last two parts.
Does the ST-8 Form Impact My Property Taxes?
Once the two parties fill out the form, the contractor holds onto it for their records. A lot of people ask whether or not the form impacts their New Jersey State Property Taxes. The answer is no – ST-8 forms do not impact your property taxes.
In fact, once you fill out this form your contractor holds onto it. They do not file it, but simply keep it for their records.
What Else Do I Have To Fill Out When Installing a Fence?
When you choose Artistic Fence to install a fence in New Jersey, there are a few other pieces of paperwork we like you to sign besides the ST-8 form:
- The Contract
- A Permit Form
- Expectation Letter
These documents are simple and important when it comes to installing your fence.
First, we need you to sign your contract, which includes a verbal description and drawing of the proposed fence. Before you sign this, make sure it has the correct length, height, style, and material for your fence. Also make sure it includes any gates, caps, and staining/painting.
If you have any questions, please bring them up to your salesperson.
A Permit Form
The next piece of paperwork we need you to sign is the permit form. You’re basically just telling us that you’re getting the permit or asking for us to get it for you.
We always recommend getting the permit yourself. It’s cheaper and quicker that way. We charge a fee plus the town fee to go get your permit.
While our contracts spell out everything each party is responsible for, we often send out a letter as well so you know exactly what you can expect when we install your fence. Here are a few bullet points that summarize this simple letter:
- Make sure the style, height, and any other specifications are written on the contract. Any changes will incur an additional charge
- We would like you to be present during the installation to answer any questions and to make sure we install in the correct location
- You will be responsible for any obstruction that is in the way of the fence line (like bushes, shrubs, flowers, plants, trees, logs, etc.)
- If we are clearing any of the above, please be aware that we do not cart this material or any dirt away
- All balances must be paid upon completion
ST-8 Forms | A Review
If you’ve made it this far, you’re an ST-8 form pro. You don’t need to as “What is a ST-8 form?” anymore. You know!
You know that ST-8 forms are a sales tax form in the state of New Jersey that keep you from paying sales tax on capital improvements to permanent properties.
If you’re going to hire someone like Artistic Fence to install a fence on your property, it’s important that you sign an ST-8 form.
If you’re looking for a new fence, you can fill out our contact form and we’ll schedule a time for one of the Good Fence People to come out for a free estimate.
Artistic Fence Co.
Established in 1983, Artistic Fence is a locally owned and operated fencing company that has provided customers in the northern New Jersey area with long-lasting fences and home enclosures for over thirty-five years. That’s why we’re known as “The Good Fence People!”
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