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NJ sales tax question? Capital improvments..

Discussion in 'Business Operations' started by mrusk, Apr 8, 2005.

  1. mrusk

    mrusk LawnSite Gold Member
    Posts: 3,260

    I got a question regarding sales tax in NJ. I know i have to charge tax on lawn care, however do i charge tax on retaining walls? I remember my accountant told me the only thing not taxed is captial improvments to the home. Is a retaining wall a capital improvment?
    What do you guys think?

  2. jc1

    jc1 LawnSite Bronze Member
    Posts: 1,617


    TJLANDS LawnSite Bronze Member
    Posts: 1,669

    Yes a retaining wall is considered a capitol improvement and not taxable in NJ
  4. basic lawn

    basic lawn LawnSite Member
    from nj
    Posts: 50

    I read a memo where they changed the law in 2005/6. Do not recall specifics, but results were to add sales tax for some services that were not taxable. i.e. some things are no longer considered capital improvements. Sorry I do not have specifics in front of me...

    I was very upset once when the local paper--cover page- made a blanket statement stating that NJ landscapers were not currently charging sales taxes, and a "new" law was going to take care of that loophole and eliminate that. Of course no distinction was made about capital improvements.

    Actually it was a customer who read that and aske me why I had been charging her with state sales taxes!!! I decided I had to notify each customer (some by phone, some by mail, and some in person) that the newspaper story was wrong, and why. Most of them were very sympathetic to my clarification.
  5. Allure

    Allure LawnSite Senior Member
    Posts: 426

    (N.J.S.A. 54:32B-3(b)(2)) - Read the Tax Note on this topic.

    The law defines “Landscaping Services” as services that result in a capital improvement to land, other than structures of any kind whatsoever, such as: seeding, sodding or grass plugging of new lawns; planting trees, shrubs, hedges, plants; and clearing and filling land. (N.J.S.A. 54:32B-2(ww)). Previously, certain landscaping services that resulted in a capital improvement were exempt. The law eliminates the capital improvement exemption for landscaping services, so now the labor is taxable. Businesses that provide landscaping services are still treated as contractors under the law.

    you can find this at http://www.state.nj.us/treasury/taxation/index.html?salestaxbase.htm~mainFrame if you scroll down.
    since the wall is a 'structure' i would say it is not taxable but i would double check if i were you.

    TJLANDS LawnSite Bronze Member
    Posts: 1,669

    For now the only "landscaping" that is tax exempt is Hardscape, pavers, walls, patios etc....and I am sure that will change in the upcomming years.

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