I think it means that if you purchase a window air conditioner unit (for
example), you DO have to pay sales tax on the unit itself and on the cost of
having a contractor put it in (if you used a contractor).

But, if you replace a 20 year-old HVAC unit with a new compressor, blower,
condenser, you DO NOT have to pay sales tax on the unit or on the cost of
having the contractor put it in. That would be considered an exempt capital
improvement, and no sales tax is due.

Here's a link that may help:

http://www.state.nj.us/treasury/taxa.../sales/st8.pdf

Paying a 7% sales tax for work done by contractors is fairly new in New
Jersey (enacted about a year or two ago). And, guess what...., if your
contractor does not charge you a sales tax when one is due, you are
obligated to pay it anyway. And, if you do not pay it, the state can hold
YOU responsible for it because you allowed the contractor to not charge the
tax This only applies to contractor work that the 7% sales tax applies to,
not to work such as replacing the HVAC because that is an exempted capital
improvement which is not subject to the sales tax.


"loch" wrote in message
...
Hi all,

What does this phrase from the NJ sales tax guidance mean?

"The purchase and installation of an air conditioner is taxable when
the unit is placed into an existing space
or metal casing that is part of a structure. An air conditioner that
can be removed from its casing by the
owner is not a capital improvement and remains tangible personal
property."

When is an central air conditioner not put into an 'existing space'?
Every AC unit, brand new or a replacement is put into an existing
space, not into outer space or something.

So if we replaced a 20 year old unit with new compressor, blower,
condenser - are we supposed to pay sales tax?