NJ Tax Question

Discussion in 'Business Operations' started by sicnj, Mar 31, 2006.

  1. sicnj

    sicnj LawnSite Senior Member
    Posts: 258

    I have questions with taxes what does the customer have to pay taxes on?
    do you have to charge tax on Mulch?
    Do you tax for the labor to put down the mulch? can it be considered home improvement?
    i know you have to charge taxes on cutting or lawn mait.
  2. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    yes and yes
  3. Turfdude

    Turfdude LawnSite Bronze Member
    Posts: 1,900

    Actually, the answer is not that cut -n -dry Rod. WE as landscapers must pay tax on all materials purchased for use in landscapes unless they're used for an exempt organization (and if this is the case, you must submit an st-13 formto the landscape material seller). Also, sales tax must be charged on all labor, but not on materials, but this may lead to a dilemma (how do you submit on materials if you purchase for $x, but mark up to $x+$y... you know the state will want the diff on the mark-up $y). Now if you simply say install 1 yard of mulch $xx (which includes mats & labor), you tax on the total.

    Furthermore, any exempt organizationthat supplies you with a completed st-5 form is not responsible for sales tax.

    Finally, any landscape install (capital improvement) is exempt from tax if the client completes a ST-8 sales tax exempt form for capital improvement.

    I do suggest that you check out all of the above with your accountant. There used to be a form available titled something like NJ sales tax and the landscape contractor which spelled this out more clearly, but I haven't seen one since the late 80's or early 90's.

    BTW, I believe the following are all maintenance services: mowing, pruning, mulching, flower planting, tree trimming, leaf clean-ups, fertilizing, aerating, thatching, overseeding and any other maintenence type of service.
    Good luck
  4. jc1

    jc1 LawnSite Bronze Member
    Posts: 1,620

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