State of New Jersey

ST-8 (3-07, R-11)

DIVISION OF TAXATION
To be completed by both owner of real property and contractor, and retained by contractor. Read instructions on back of this certificate. Do not send this form to the
Division of Taxation.

SALES TAX

FORM ST-8
CERTIFICATE OF EXEMPT
CAPITAL IMPROVEMENT

A registered New Jersey contractor must collect the tax on the amount charged for labor and services under the contract unless the owner gives him a properly completed Certificate of Exempt Capital Improvement.

MAY BE ISSUED ONLY BY THE OWNER OF THE REAL PROPERTY
MAY NOT BE ISSUED FOR THE PURCHASE OF MATERIALS
_______________________________________________________________________________________________________________
(Name of Contractor)

_______________________________________________________________________________________________________________
(Address of Contractor)

_______________________________________________________________________________________________________________
(Contractor’s New Jersey Certificate of Authority Number)

THE FOLLOWING INFORMATION MUST BE FURNISHED:
The nature of the contract is as follows (describe the exempt capital improvement to be made):______________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
The address or location where work is to be performed: _____________________________________________________
__________________________________________________________________________________________________
TOTAL AMOUNT OF CONTRACT $ ____________________________________________________________________
The undersigned hereby certifies that he is not required to pay sales and use tax with respect to charges for installation of tangible personal property, because the performance of the contract will result in an exempt capital improvement to real property. The undersigned purchaser hereby affirms (under the penalties for perjury and false swearing) that all of the information shown in this Certificate is true.
CONTRACTOR’S CERTIFICATION
I certify that all sales and use tax due has been or will be paid by the undersigned on purchases of materials incorporated or consumed in the performance of the contract described herein.

PROPERTY OWNER’S SIGNATURE
_____________________________________________________
(Name of owner of real property)

_____________________________________________________
(Address of owner of real property)

By __________________________________________________
_____________________________________________________
(Signature of Contractor)

(Date)

_____________________________________________________
(Signature of owner, partner, officer of corporation, etc.)

(Date)

Any person making representations on this certificate which are willfully false may be subject to such penalties as may be provided for by law.

REPRODUCTION OF CERTIFICATE OF EXEMPT CAPITAL IMPROVEMENT FORMS: Private reproduction of both sides of the Exempt Capital Improvement Certificates may be made without the prior permission of the Division of Taxation.

INSTRUCTIONS
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 properly 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 capital improvements listed below)
New roof, installation of
In-ground swim pool, installation of
Tiled bath, installation of
New central air conditioner installation
New bath fixtures, installation of
Painting a newly constructed house
New kitchen cabinets, installation of
New hot water heater installation
New kitchen fixtures, installation of
Patio, construction of
Paving of driveway

Paneling, installation of
New heating system installation
Rewiring
New electrical outlets installed
New siding, installation of
Garage, construction of
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
TO THE CONTRACTOR:
If you enter into a contract to add to or improve real property by an exempt capital improvement (see examples above) and the property owner issues to you a properly completed Certificate of Exempt Capital Improvement, which you must retain, you should not collect sales tax from the property owner. (You are required to pay sales tax to your supplier on the purchase of the tangible personal property you purchase for use in performing the contract irrespective of whether the work constitutes a repair or a capital improvement.)
However, if you enter into a contract to repair, maintain, or service real or tangible personal property, or to install a taxable capital improvement, you must collect tax on the charge for labor or services performed in accordance with the contract.
GOOD FAITH:
In general, a contractor who accepts a Certificate of Exempt Capital Improvement in “good faith” is relieved of liability for collection or payment of tax upon transactions covered by the certificate.
In order for “good faith” to be established, the following conditions must be met:
(a) The certificate must contain no statement or entry which the contractor knows is false or misleading.
(b) The certificate must be an officially promulgated certificate or a proper reproduction thereof.
(c) The certificate must be dated and executed in accordance with the published instructions, and must be complete and regular in every respect.
The contractor may, therefore, under the circumstances, accept this “good faith” Certificate of Exempt Capital Improvement as a basis for not collecting sales tax with respect to service or labor charges.
Sales transactions which are not supported by properly executed certificates shall be deemed to be taxable sales and the contractor must collect the proper tax. In the case of an improper certificate or the absence of a certificate, the burden of proof that the tax was not required to be collected is upon the contractor. If the above listed good faith requirements are met, a contractor is relieved of liability if the purchaser was not entitled to the exemption.
CORRECTION OF CERTIFICATE:
In general, contractors have 90 days after performance of the contract to obtain a corrected certificate where the original certificate lacked material information required to be set forth in said certificate or where such information is incorrectly stated.
RETENTION OF CERTIFICATES:
Certificates must be retained by the contractor for a period of not less than four years from the date of performance of the contract covered by the certificate. Certificates must be in the physical possession of the contractor and available for inspection on or before the 90th day following the date of the transaction to which the certificate relates.
FOR MORE INFORMATION:
Call the Customer Service Center (609) 292-6400. Send an e-mail to nj.taxation@treas.state.nj.us. Write to: New Jersey Division of Taxation, Information and Publications Branch, PO Box 281, Trenton, NJ 08695-0281.

ST-8 (3-07, R-11)