Taxes for Small Retail Site.

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Fordean

Senior Member
Location
New Jersey
Occupation
Electrical Contractor
Ground up 6000 foot building and Existing parking lot alterations to accept new building.


When do you add taxes. Isnt this capital improvement? Curious.
 

LEO2854

Esteemed Member
Location
Ma
Ground up 6000 foot building and Existing parking lot alterations to accept new building.


When do you add taxes. Isnt this capital improvement? Curious.
That depends on what state you live in, here we pay the sales tax on the stock and pass that cost onto the client.
 

jrannis

Senior Member
Ground up 6000 foot building and Existing parking lot alterations to accept new building.


When do you add taxes. Isnt this capital improvement? Curious.

I pay taxes when I purchase materials. So what I sell is complete.

Some people add a line item and show an additional 6% with no description. Customers assume it is sales tax and pay it without thinking about it. :ashamed1:
 

Fordean

Senior Member
Location
New Jersey
Occupation
Electrical Contractor
Taxes

Taxes

I pay taxes when I purchase materials. So what I sell is complete.

Some people add a line item and show an additional 6% with no description. Customers assume it is sales tax and pay it without thinking about it. :ashamed1:

Yes, I pay all material Taxes up front. And Equipment, Labor taxes. All up front. So I guess that covers it. Then.
 

kwired

Electron manager
Location
NE Nebraska
Yes, I pay all material Taxes up front. And Equipment, Labor taxes. All up front. So I guess that covers it. Then.

Still depends on the laws of your sales tax jurisdiction and/or the jurisdiction where the installation is located, there is no one answer fits all, and even different types of sales items often will have different rules. You may have some jobs where taxes are exempt and others where they are not, and often if you make "over the counter" sales you are supposed to collect and remit sales tax on the sale amount even if you paid tax when you purchased the item.
 

infinity

Moderator
Staff member
Location
New Jersey
Occupation
Journeyman Electrician
In NJ capital improvements are sales tax exempt. You should be using a ST-8 form for the building owner. Here's what part of the form says:

TO THE PROPERTY OWNER: In cases where the contractor performs work which results in an exempt capital improvement to your house or land
(real property), he may NOT charge you any sales tax if you issue to him a fully completed Certificate of Exempt Capital Improvement (Form ST-8).
It is important to distinguish between an exempt capital improvement and a taxable capital improvement, repair or installation. If the fulfillment of a
contract only maintains the existing value of the property, it is a repair and not a capital improvement. Where an improvement results in an increase in the
capital value of the real property, it is generally considered that a capital improvement has been performed.
(But see below list of taxable capital improvements.)
As an aid to determine whether a contract is for a repair to real property or a capital improvement to real property, the treatment of such transaction for
income tax purposes under the Federal Internal Revenue Code may be used as a guide. If you have any doubt whether the work to be performed constitutes
a repair or an exempt capital improvement, you should communicate with the Division of Taxation and describe in detail such work.
The following are examples of exempt capital improvements:
New construction (other than taxable Porch enclosure, construction of Paneling, installation of
capital improvements listed below) New roof, installation of New heating system installation
In-ground swim pool, installation of Tiled bath, installation of Rewiring
New central air conditioner installation New bath fixtures, installation of New electrical outlets installed
Painting a newly constructed house New kitchen cabinets, installation of New siding, installation of
New hot water heater installation New kitchen fixtures, installation of Garage, construction of
Patio, construction of Paving of driveway Storm doors and windows, original
or initial installation of
The following are examples of taxable capital improvements. This form cannot be issued for these services, which are subject to sales tax on and after
October 1, 2006:
-Seeding, sodding, grass plugging of new lawns, planting trees, shrubs, hedges, plants, etc.
-Clearing and filling land associated with seeding, sodding, grass plugging of new lawns, or planting trees, shrubs, hedges, plants, etc.,
including tree/stump removal
- Installing carpeting and other flooring
- Installing a hard-wired security, burglar or fire alarm system

http://www.state.nj.us/treasury/taxation/pdf/other_forms/sales/st8.pdf
http://www.nj.gov/dep/exams/docs/contractor_sales_tax.pdf
 
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