New Jersey Administrative Code
Title 18 - TREASURY - TAXATION
Chapter 24 - SALES AND USE TAX ACT
Subchapter 5 - CONTRACTORS AND SERVICES PERFORMED ON REAL PROPERTY
Section 18:24-5.6 - Contractor's tangible personal property installation services
Universal Citation: NJ Admin Code 18:24-5.6
Current through Register Vol. 56, No. 18, September 16, 2024
(a) Treatment of installation services that do not result in a capital improvement are as follows:
1. Charges for services rendered by a contractor
for installing tangible personal property, which, when installed, will not result in
a capital improvement to real property, are subject to tax.
(b) Treatment of installation services that result in capital improvements are as follows:
1. Charges
for the following types of services are taxable even though they result in a capital
improvement:
i. Landscaping services;
ii. Installation of floor covering; and
iii. Installation of alarm or security
systems;
2. Charges for
landscaping, floor covering installation, and alarm system installation charges that
result in capital improvements are taxable to the party who contracts with the
contractor performing the service, which may be the property owner or the prime
contractor; and
3. Charges for
installation services that result in capital improvements, except the services
listed in (b)1 above, are exempt from sales tax.
(c) The factors used to determine whether services result in a capital improvement are as follows:
1.
In determining whether an installation of tangible personal property results in a
capital improvement depend upon if:
i. The
improvement results in an increase in the value of the real property; and
ii. The improvement results in a significant
increase in the useful life of the real property; and
2. A determination of whether services result in a
capital improvement for sales tax purposes does not depend upon the characterization
of the work for local property tax purposes.
Disclaimer: These regulations may not be the most recent version. New Jersey may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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