When you hire a contractor in New Jersey, one of the questions that may come to mind is whether or not you`ll be charged sales tax. It`s a valid concern, as sales tax can add up quickly and impact your budget for the project.
So, do contractors charge sales tax in NJ? The short answer is, it depends.
In New Jersey, contractors are required to charge sales tax on both labor and materials for most construction and home improvement projects. However, there are some exemptions to this rule.
For example, if you`re having repairs done to your primary residence, the contractor may not be required to charge sales tax. This exemption also applies to certain types of fixtures and appliances that are considered part of the home, such as a built-in oven or dishwasher.
If the project is for a commercial property or a rental property that you own, then sales tax will likely be charged on both materials and labor.
It`s important to note that even if a contractor is exempt from charging sales tax on certain aspects of the project, they may still need to collect it on other items. For example, if they are purchasing materials that are taxable, they will need to charge sales tax on those items.
It`s also worth mentioning that the rules and regulations regarding sales tax in New Jersey can be complex and vary depending on the specific project and situation. It`s always a good idea to discuss this with the contractor beforehand and review the contract carefully to make sure everything is clearly outlined.
In summary, while contractors in New Jersey are generally required to charge sales tax on both labor and materials, there are some exemptions to this rule. It`s important to understand the specific requirements for your project and work with the contractor to ensure that everything is properly accounted for.
