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Question DetailsAsked on 8/5/2014

Do general contractors in NJ charge tax on their work?

A general contractor on Angie's List is charging me tax for maintenance and repair work on the exterior of a house. I have never been charged tax on work before, is this proper? The tax being charged on my estimate is 7%. Thank you.

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7 Answers

Voted Best Answer
1
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In the state of New Jersey all repairs are taxed, home improvements are not though if the materials are charged separately they are taxed. As I am located in New Jersey I always try to word my contracts as a new install when ever possible. It is a fine line, when replacing windows for example it is a home improvement but if you were to just replace the glass it is a repair. I also explain why I will not list materials as a separate item to customers to avoid having to tax them.

I hope this helps.


Don

Answered 5 years ago by ContractorDon

0
Votes

Thank you, Don! In all the years I’ve had work done on a house in another state, tax was never charged. Now trying to get repairs done on my mother’s home in NJ, I am being charged tax. I was charged 7% on the entire amount and was surprised not having run this before. You explained it very well. It does seem like a fine line. The work is exterior repairs to the roof, gutters and downspouts from storm damage so I guess that falls in the tax category in NJ. I appreciate that you answered my question.
Madilyn

Answered 5 years ago by Guest_9254798

1
Vote

If your contractor was nice he would neglect to say he was taking off gutters or that it is a roof patch and bend the rules that way. I am not sure on the fact that it is storm damage if it should be taxed. I redid a house after Irene and did not charge tax.

I may have to research that.


Don

Answered 5 years ago by ContractorDon

0
Votes

Don, thanks, I tend to agree, and I am wondering now if I should be taxed since all the work is due to storm damage (from Sandy, and we are only getting to it now since it took some time to get the insurance funds). I told the contractor about that and the limited budget. The estimate came to exactly the limit we discussed but then there was 7% tax added to that amount. Guess he thinks he needs to charge the tax but I am glad I questioned it because I had some other concerns as well, and so far the work has not begun. Do you have a general contracting business in NJ? If so, do you have a listing on Angie's List where I may contact you, maybe get an estimate from your business? Thank you, I really appreciate your help!
Madilyn

Answered 5 years ago by Guest_9254798

1
Vote

I would think a call to your Insurance Agent might be a good idea. I thought this was work that was completed. I would think the agent could help with this as the claim should have covered all cost and should have been itemized down to showing sales tax if required. I am starting to think this is your contractors way of adding a few dollars to his bottom line. You do have to pay tax on the materials used but that should be figured into the contractors price for materials unless they are listed as a separate line item on the contract.

I do have a listing on Angies but number one I would bet you are down near the shore area and that is a bit of a distance from be as I am near the New York border and at this time I am booked.


Don

Answered 5 years ago by ContractorDon

0
Votes

Thank you, Don. Calling the insurance agent is a good idea. I had repeatedly asked the contractor for a detailed, itemized estimate. That’s not what I received. Also, before he would even give me an estimate he requested that I purchase a Big Deal. I am new to Angie’s List (got the membership specifically for taking care of work on my mother’s house there in NJ) and thought that’s how it’s done but I believe I may have been in error doing that because his service offers free estimates anyway. Then when I saw the tax I decided to research this matter further. I sincerely appreciate all the help you’ve given me and that you’ve answered very quickly. The house is not near the shore at all, it’s in Central NJ, Bridgewater area. I may research other contractors in that area to get this done. Thanks again!
Madilyn

Answered 5 years ago by Guest_9254798

1
Vote

I am not the best at computer related things but will try. Here is a post from NJ on this topic,

http://www.njba.org/pages/?New-Jersey...

It seems that some of the work may have to be taxed but it seems that the contractor is being lazy by not itemizing the invoice.

The phone number for NJ Sales Tax customer service is 609-292-6400 and they may be able to help. I would think this stupid state would have treated all storm damage as tax exempt.


Good Luck Don

Answered 5 years ago by ContractorDon

0
Votes

Don, I really appreciate all your help! I am calling the NJ tax office, thank you for providing the phone number because I was about to look it up. And thanks for the link too, it has excellent information. (I agree, you’d think storm damage work would be tax exempt!) This contactor is probably fine for getting the work done, he has mainly A ratings here, but my husband had the same thought as you that the contractor was just being lazy by not itemizing the invoice. Realizing how this works now, I have no intention of paying any more tax than is required. So with the information in hand, I can negotiate with the contractor to only pay what is proper. The tax added on to the invoice total was a surprise and I’m glad I put this question on Angie’s List, and I am very pleased that a knowledgeable person such as you answered my questions, and so promptly too. You have been a great help to me, thank you again!
Madilyn

Answered 5 years ago by Guest_9254798




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