N.J. Admin. Code § 18:24-5.3

Current through Register Vol. 56, No. 9, May 6, 2024

Section 18:24-5.3 - Purchase of materials and supplies by contractors

(a) Sales of materials and supplies to contractors for use by them in erecting structures for others, or building on, or otherwise improving, altering, repairing, or maintaining the real property of others, including performing landscaping services, are deemed to be retail sales. Examples of taxable purchases of materials and supplies include, but are not limited to:

1. Grout by a home repair service provider;

2. Fertilizer and pesticides by a lawn service, tree service, or other landscaping service;

3. Pipes by a plumber; and

4. Lumber by a builder of new houses.

(b) Except as provided in this subchapter, contractors purchasing materials and supplies must pay sales tax at the time of purchase. This subchapter does not apply where:

1. The purchase of materials and supplies is made for exclusive use in the fulfillment of a contract to improve or repair the real property of an exempt organization described in 54:32B-9(a) and (b) or a qualified business described in the New Jersey Urban Enterprise Zones Act, 52:27H-29 et seq., or a housing sponsor described in 54:32B-8.2 2.c.

i. For the purpose of (b)1 above, exclusive use means that the supplies purchased will be entirely consumed in use or lack any residual utility after use and the supplies will not be used on jobs performed for nonexempt organizations either prior to, simultaneously with, or after completion of the exempt organization job; or

2. The contractor holds a valid Direct Payment Permit (Form ST-6).

N.J. Admin. Code § 18:24-5.3

Amended by 48 N.J.R. 824(a), effective 5/16/2016