Capital Improvement sales tax?
I am currently doing a gut renovation of a kitchen and bathroom in Brooklyn. I recently mentioned it to a friend who said that I shouldn’t have to pay sales tax because of something called Capital Improvements. This term was new to me as a first time home owner and renovator. I had a look…
I am currently doing a gut renovation of a kitchen and bathroom in Brooklyn. I recently mentioned it to a friend who said that I shouldn’t have to pay sales tax because of something called Capital Improvements. This term was new to me as a first time home owner and renovator. I had a look at the New York State website and it seems that it is true to best of my understanding. My contract with my contractor lists the price for the work on the kitchen and bath and below that list the sales tax which comes to several thousand dollars. Is there any reason why I should have to pay this tax? It is nearing the completion of the job, but still owe about $8000 in contracting fees so sales tax could be deducted from that. How to best approach the subject with the contractor? Any help would be appreciated.
8:14 is wrong.
If so, I misread. Seemed like it was for anyone doing renovation. I don’t think I should get a tax break for a gut reno of my own living space.
I think that the “subsidy” is available to people at all income levels and acts as an incentive for people that do work on buildings that require upgrading so that they can be rented to people who can’t afford to own.
Anyone know if you can get your money back on sales tax you already paid.
http://www.tax.state.ny.us/pdf/publications/sales/pub862_401.pdf
document about what can and can not be claimed as a Capital Improvement
http://www.tax.state.ny.us/pdf/1997/st/st124_797.pdf
This is the link to the NYS capital improvement form.
This form relieves the contractor from the responsibility of collecting the sales tax from you and passing it along to the state. Of course the contractor often objects because he often pockets the money.
A couple of points, the exemption is only for capital improvements and not repairs or decorating. Also the contract work must include both labor AND materials, not only one component or the other.
One more subsidy to the upper class I didn’t take advantage of. Time to change accountants.
Can you post a link to the NYS webpage that describes this sales tax break?
Yes, you should take advantage of that tax break. Talk to your accountant about it and fill out the right forms. Many contractors charge you sales tax ( and I believe it’s often pocketed ). Once you have the paperwork in hand approach your contractor about it.