Quartz countertops have become an increasingly popular option for kitchen and bathroom remodels in recent years. Made from ground quartz crystals combined with resins and pigments, quartz offers an attractive, durable, and low-maintenance alternative to natural stone and laminate. However, when it comes to renovating your home in New Jersey, an important question arises – are quartz countertops taxable?
An Overview of Sales Tax in New Jersey
New Jersey has a statewide sales and use tax rate of 6.625%. This means that most retail sales of goods and some services in New Jersey are subject to this tax rate. However, sales tax laws can be quite complex, with exemptions for certain items and variations based on the seller, buyer, and nature of the transaction. So to determine if quartz countertops are taxable in New Jersey, we need to dig into the specifics.
Some key points about New Jersey sales tax:
- It applies to most tangible goods, including building materials and fixtures.
- Services are only taxed if specifically enumerated. For example, installation labor for countertops is not taxable.
- Sales tax is collected by the seller when the retail sale takes place.
- Use tax applies when sales tax was not collected at the time of sale. For example, materials purchased online from an out-of-state seller.
- Home improvements are taxable, but there are exemptions for certain medical equipment and improvements to make a home accessible for people with disabilities.
So in general, any tangible goods purchased at retail in New Jersey, including countertops, will be subject to sales tax. However, there are some exemptions that may apply.
Are Quartz Countertops Tax Exempt in New Jersey?
Whether quartz countertops are taxable in New Jersey depends on the specifics of the transaction:
Quartz Countertops Purchased from a New Jersey Retailer
If you buy quartz countertops from a store or contractor located in New Jersey, they are taxable. The seller is required to collect New Jersey sales tax at the time of purchase. The tax rate will be 6.625% of the total sales price, including any charges for fabrication, installation, etc.
Quartz Countertops Purchased Online from an Out-of-State Seller
If you purchase quartz countertops online from a retailer located outside of New Jersey, they are also taxable, but the tax may not be collected up front. As the buyer, you are required to calculate your use tax and remit it to the state. The use tax rate is the same 6.625% based on the total purchase price.
Quartz Countertops Installed in a New Home Construction or Addition
If your quartz countertops are being installed as part of a home addition or new home construction, they may be exempt from sales tax under the following conditions:
- You directly purchase the materials yourself (rather than the contractor).
- The materials are permanently incorporated into the new home construction.
- You provide the materials retailer with a valid Form ST-8 from your contractor.
This exemption applies to other building materials aside from quartz countertops as well.
Quartz Countertops Installed in an Existing Home
For quartz countertop installations in an existing New Jersey home, the materials are generally taxable. This is considered a home improvement, rather than new home construction, so the sales tax exemption does not apply.
How Sales Tax Applies to Different Quartz Countertop Purchases
To summarize, here is how sales tax typically applies to different quartz countertop purchase scenarios in New Jersey:
- Quartz countertops purchased from a NJ retailer or contractor: Taxable at 6.625%
- Quartz countertops bought online from an out-of-state seller: Technically taxable, but use tax may not be collected. Buyer must remit 6.625% use tax to NJ.
- Quartz for new home construction/addition: Exempt with valid Form ST-8 provided to the materials retailer.
- Quartz countertop installation in existing NJ home: Taxable at 6.625% sales tax rate.
- Only fabrication/installation labor: Not taxable. NJ tax applies to materials only.
Claiming a Rebate on Sales Tax Paid for Home Improvements
If you are renovating your existing New Jersey home and need to pay sales tax on your new quartz countertops, you may be able to claim a rebate on some of the tax paid by filing Form HME-1.
Home Improvement Tax Rebate Key Facts:
- Covers up to 50% of sales tax paid on home improvements, up to $500 total credit.
- Applies to renovations exceeding $5,000 in material costs.
- Work must be done on an existing NJ home owned and occupied by claimant.
- Income eligibility requirements apply based on NJ gross income.
So if your quartz countertop installation qualifies based on the above criteria, you can recoup some of the sales tax paid by claiming the home improvement rebate. Consult the Form HME-1 instructions for full details and eligibility requirements.
Sales Tax on Quartz Countertops: Final Considerations
- Keep all receipts and invoices showing sales tax paid on quartz countertops. These are required to claim the home improvement rebate.
- If you purchase materials out of state without paying sales tax, you are still required to calculate and remit use tax to NJ. Failure to do so could lead to fines if audited.
- For new home construction, provide the materials retailer with a valid Form ST-8 from your contractor to make your purchase tax-exempt.
- Check with your accountant or tax advisor if you have questions about use tax and out-of-state purchases. Improper use tax reporting could trigger an audit.
- Labor charges for countertop fabrication and installation are not taxable in New Jersey. Only the materials are subject to tax.
Complying with New Jersey sales and use tax rules for quartz countertops can be complicated in some cases. But following the guidelines above will help ensure you pay only the tax that is properly due based on your specific purchase circumstances. Consult a tax professional with any questions before proceeding with your quartz countertop project.
Frequently Asked Questions About Quartz Countertops and New Jersey Sales Tax
1. Are quartz countertops taxable if I buy them directly from the manufacturer?
Yes, quartz countertops purchased directly from a manufacturer are still subject to New Jersey sales tax. As long as the seller has a physical presence or nexus in New Jersey, they are required to collect sales tax on materials purchased at retail. The taxability does not change based on where in the supply chain you make your purchase.
2. Can I avoid the sales tax on quartz counters by purchasing out of state?
You can avoid paying New Jersey sales tax at the time of purchase by buying from an out-of-state retailer. However, use tax at the same 6.625% rate would still apply as the buyer. Failure to properly remit use tax could lead to tax liabilities, interest, and penalties if audited.
3. Is the sales tax rate for quartz countertops higher than other items?
No, quartz countertops are taxed at the standard New Jersey sales and use tax rate of 6.625%. There are very few exceptions where higher rates apply, mainly related to liquor, lodging, and restaurant sales. All retail sales of tangible goods are taxed at 6.625% unless a valid exemption certificate is provided.
4. If I buy quartz slabs directly, do I still pay sales tax?
Yes, purchases of quartz slabs for countertops are taxable even if you buy them directly. Sales tax applies whether you purchase finished countertops, raw slabs, or fabricate them yourself. The only exception would be slabs bought for new home construction/addition with a valid Form ST-8.
5. Can I avoid the tax on installation charges for my new quartz counters?
Yes, the labor charges for installing or fabricating quartz countertops are not taxable in New Jersey. You only pay sales tax on the actual materials. Be sure your invoices clearly separate material and labor charges to exclude labor from tax.
6. Where can I get Form ST-8 for new home construction exemptions?
Form ST-8 is available directly from the New Jersey Division of Taxation website. Your contractor must complete it certifying that the building materials purchased will be permanently incorporated into new home construction or an addition.
7. If a contractor buys my quartz counters, do I still pay sales tax?
Yes, even if your contractor purchases the quartz countertops on your behalf, they are still considered taxable. A contractor’s purchase for a home improvement project does not qualify for any sales tax exemption. You can avoid paying contractor mark-ups by purchasing the materials yourself.
I hope this guide has helped answer your questions surrounding quartz countertops and sales tax in New Jersey. Always be sure to keep detailed records and obtain valid exemption certificates when applicable. Reach out to a qualified tax professional to discuss your specific situation if you need additional advice or clarification.
Determining whether quartz countertops are taxable in New Jersey can be confusing, since sales tax laws contain many nuances and exemptions based on the details of each transaction. In general, expect to pay sales or use tax at 6.625% when purchasing quartz countertops as a New Jersey resident. However, you may qualify for an exemption on materials for new home construction or additions if you provide Form ST-8 to the seller. You can also recoup some of the tax paid through the NJ home improvement tax rebate. Be sure to consult professionals and keep detailed records related to your quartz countertop purchase to remain compliant and take advantage of all savings opportunities. With some diligence, you can proceed with your kitchen or bath remodel with clarity on the tax implications.