To fill out New Jersey Form ST-8, the Certificate of Exempt Capital Improvement, complete every field in both the property owner and contractor sections, describe the qualifying work specifically enough that an auditor can see why it’s exempt, sign and date the form, and give it to your contractor before they invoice you. The contractor keeps it as their proof for not charging the 6.625% sales tax on labor. The form is never filed with the New Jersey Division of Taxation.1New Jersey Division of Taxation. Sales Tax Form ST-8 Certificate of Exempt Capital Improvement
Before You Sign: Make Sure the Work Qualifies
Signing an ST-8 for work that doesn’t qualify shifts the unpaid tax liability onto you, so this step matters more than the paperwork itself. Under N.J.A.C. 18:24-5.16, a capital improvement is an installation of tangible personal property that increases the value of the real property or significantly extends its useful life, and the item must be permanently attached.2Legal Information Institute. New Jersey Administrative Code 18:24-5.16 – Certificate Issuance and Acceptance Procedures Work that merely restores what was already there is a repair, and repairs are taxable.3New Jersey Division of Taxation. Sales Tax and Home Improvements (S&U-2)
Scope often decides the question. Patching a leaky roof section is a repair; replacing the whole roof is a capital improvement. Retiling one loose spot is a repair; retiling the entire bathroom with upgraded materials is exempt.3New Jersey Division of Taxation. Sales Tax and Home Improvements (S&U-2) Common qualifying projects include new construction, room additions, a complete new roof, new central air or heating, new kitchen or bathroom cabinets and fixtures, rewiring, siding, decks, fences, paved driveways, in-ground pools, and initial installation of storm doors and windows.1New Jersey Division of Taxation. Sales Tax Form ST-8 Certificate of Exempt Capital Improvement
Certain projects look like capital improvements but the statute keeps them taxable. You cannot use an ST-8 for any of these:4Justia Law. New Jersey Revised Statutes 54:32B-3 – Imposition of Sales Tax
- Landscaping, including planting trees, shrubs, and hedges, and seeding or sodding a new lawn
- Carpeting and other flooring, including wall-to-wall carpet, tile, and hardwood
- Hard-wired burglar, fire, and security alarm systems
- Sign installation
Routine maintenance such as lawn mowing, power washing, interior painting of an existing home, and snow removal never qualifies either. Your contractor should be charging 6.625% on the labor for that work regardless of any certificate you offer.3New Jersey Division of Taxation. Sales Tax and Home Improvements (S&U-2)
Filling Out the Form Field by Field
Download the current form, revised March 2023, from the Division of Taxation’s sales tax forms page.5New Jersey Division of Taxation. Sales and Use Tax Forms and Certificates It’s one page. Every required field has to be filled in; an incomplete certificate is treated as no certificate at all during an audit.
Property Owner Section
Enter your full legal name and the address of the property where the work is being done. Use the name and address that appear on your property tax records. A mismatch draws attention.
The form also asks for an identification number, and this is the field homeowners most often skip without realizing it. Provide your New Jersey tax identification number if you have one, your federal employer identification number if a business owns the property, or your driver’s license number if you’re signing as an individual.1New Jersey Division of Taxation. Sales Tax Form ST-8 Certificate of Exempt Capital Improvement
Contractor Section
The contractor fills in their business name, address, and 12-digit New Jersey Certificate of Authority number, which the state issued when the business registered for sales tax.1New Jersey Division of Taxation. Sales Tax Form ST-8 Certificate of Exempt Capital Improvement If you want to confirm the contractor is properly registered before you sign, the state’s online Business Registration Certificate service lets you verify status by business name or ID number.6New Jersey Department of Treasury. Online Business Registration Certificate Service
Nature of the Work
The description field is where most ST-8 problems begin. “Renovation” or “remodeling” tells an auditor nothing. Write something concrete: “installation of a complete asphalt shingle roof on a single-family home,” or “construction of a 12-by-20-foot wood deck with concrete footings.” The description should make the exemption obvious on its face — new installation, permanently attached, adding value or extending useful life.
If your project mixes exempt and taxable work, list only the exempt portion on the ST-8. A whole-house job that includes a new roof (exempt) and new bedroom carpet (taxable) needs the roof on the certificate and sales tax paid on the carpet labor.
Contract Amount and Signatures
Enter the total dollar amount of the contract for the exempt work only. Both you and the contractor sign and date the form. Your signature certifies that the described work qualifies as a capital improvement under New Jersey law. That certification is what shifts liability to you if the exemption turns out to be wrong, so don’t sign for work you haven’t confirmed against the rules above.
Delivering and Keeping the Form
Hand the completed ST-8 to your contractor before or at the time of invoicing. Do not send it to the Division of Taxation. The contractor keeps it in their permanent records as the justification for not collecting sales tax on the labor.7Legal Information Institute. New Jersey Administrative Code 18:24-5.7 – Documentation and Application of the Capital Improvement Exemption Keep a copy for yourself.
New Jersey requires sellers to preserve records supporting exempt transactions for at least four years from the filing date of the quarterly sales tax return that covered the transaction.8Legal Information Institute. New Jersey Administrative Code 18:24-2.3 – General Requirements If a contractor can’t produce the ST-8 during an audit, the Division can hold the contractor liable for the uncollected tax even when the work genuinely qualified.
The Division accepts scanned or photographed signatures and encrypted digital signatures. A printed-and-scanned signed copy is fine, so you don’t need to trade a wet-ink original if both sides prefer to handle it digitally.
Who Owes the Tax If the Exemption Doesn’t Hold
A contractor who accepts a fully completed ST-8 in good faith is generally relieved of liability for the tax, even if the work turns out not to qualify. Good faith means the exemption claimed was legally available for the type of work described and was reasonable in context. When that protection applies, the property owner who signed the certificate owes the unpaid tax.7Legal Information Institute. New Jersey Administrative Code 18:24-5.7 – Documentation and Application of the Capital Improvement Exemption
Contractors lose that protection if they knew or should have known the claim was false. A contractor who installs wall-to-wall carpet and accepts an ST-8 anyway cannot claim good faith, because carpet installation is expressly listed as a taxable capital improvement. In that case the Division can hold the contractor liable for the full uncollected tax plus interest. And if no ST-8 exists at all when an auditor asks, the contractor owes the tax whether the work was actually exempt or not.
Keep the Paperwork for Your Federal Basis
Capital improvements to your home also matter at the federal level when you sell. Improvement costs get added to your home’s tax basis, which reduces any taxable capital gain on the sale. The IRS covers this in Publication 523 and Publication 551.9Internal Revenue Service. Selling Your Home Filing your signed ST-8 with the contractor’s invoice does double duty: it documents the sales tax exemption today and supports the basis adjustment years from now.