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 18:24-5.7 - Documentation and application of the capital improvement exemption

(a) When a contractor has installed property, which, when installed, results in a capital improvement to real property, other than landscaping services, floor covering installation, or alarm system installation, he or she shall obtain from his or her customer a fully completed Certificate of Exempt Capital Improvement (Form ST-8) or other approved form and retain it in his or her permanent records.

(b) When a contractor performs an installation, which results in a capital improvement to real property, other than landscaping services, floor covering installation, or alarm system installation, no tax should be collected from the customer. Payment of the tax on materials used is the responsibility of the contractor, and therefore materials obtained and provided by the contractor are not taxable to the property owner. The installation services are not subject to tax where the installation results in a capital improvement to real property, other than landscaping services, floor covering installations, or alarm system installation.

(c) If a property owner purchases construction materials and supplies from a retail store or other supplier, instead of having them purchased and supplied by the contractor, the property owner is liable for sales or use tax on the construction materials and supplies. The capital improvement exemption applies only to the charge for services.