On Sep 17, 2:36*pm, loch wrote:
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.

I think the existing space means a space for the air conditioner, like
an existing through-wall sleeve or a window if it's a window unit.

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

That's essentially a new system, except for the duct work. I don't
believe it falls under maintenance or repair and that the work would
qualify as a capital improvement, but you really should call one of
the phone numbers on the capital improvement certificate to definitely
determine the status. The SU-2

If an owner gives a completed capital improvement certificate to a
contractor it removes the contractor's burden on collecting sales tax
based on the owner's say so. If at a later date the work is found to
be taxable, the owner is on the line for payment and penalties, not
the contractor.

If you've already paid the sales tax it will be much harder to get the
money back from the contractor. They may have already sent it in to
NJ.

R