A Primer on Sales Tax Form ST-8

By Carol Koransky, CPA, MBA

What is Form ST-8?

The Form ST-8 (certificate of exempt capital improvements) is to be used when the association is undertaking a capital improvement that is exempt from NJ sales tax.

Why Fill Out Form ST-8?

A properly completed form will exempt the contractor from charging the association for sales tax on the labor/service costs associated with exempt capital improvements. Labor costs related to repairs and maintenance is always subject to NJ sales tax.

What is Meant by Capital Improvement Versus Repair and Maintenance?

In general, if the result of the contracted work just maintains the existing value of the property then the work is considered a repair and/or maintenance item and therefore not a capital improvement. If the work results in an increase in the value of the real property, it is considered to be a capital improvement. Many, but not all, capital improvements are considered exempt capital improvements (see chart below).

table

Who Fills Out The Form?

Form ST-8 must be completed by the owner of the property that is undergoing the capital improvement. Information required includes:

  1. Name of contractor
  2. Address of contractor
  3. Contractor’s NJ certificate of authority number
  4. A description of the nature of the exempt capital improvement
  5. The address/location of where the work is being performed
  6. The amount of the contract price

Both the contractor and the owner of the property must sign the form. The contractor maintains the form with their records. The association should maintain a copy, but they are not required to remit the form to the state.

What Happens If a Form ST-8 is Not Completed?

If Form ST-8 is not filed, then the contractor must collect the sales tax on labor/services performed in connection with the exempt capital improvement.

Whose Responsibility Is It to Prepare The Form ST-8?

It is the association’s responsibility to prepare this form and remit to the contractor.

For further information, please consult your Wilkin & Guttenplan advisor or email us at This email address is being protected from spambots. You need JavaScript enabled to view it..

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