Official Site of The State of New Jersey

Sales and Use Tax Exemption for Contractor Purchases

Notice: Sales and Use Tax Exemption for Contractor Purchases – Housing Sponsors Engaged in Affordable Housing Projects Sales and Use Tax P.L. 2024, c. 3 (May 1, 2024)

P.L. 2024, c.3 amends N.J.S.A. 54:32B-8.22 to add a Sales Tax exemption for purchases of materials, supplies, and services made by contractors or repairmen for the exclusive use in erecting structures or building on, or otherwise improving, altering, or repairing real property of housing sponsors engaged in affordable housing projects where all of the units are intended for occupants with moderate, low, or very low incomes as defined in P.L.1985, c.222 27 (C.52:27D-301 et al.) the “Fair Housing Act.” The law is in effect for purchases made on or after May 1, 2024.

To claim an exemption from Sales Tax on the purchase of taxable property or services, the purchaser (contractor) must provide a fully completed Form ST-13, Contractor’s Exempt Purchase Certificate , to the seller. Otherwise, the seller must collect the tax.

A contractor working on the property of a Housing Sponsor engaged in an “Affordable Housing Project” must retain a copy of any Form ST-13 that it provides to its suppliers. If a contractor buys materials from a seller that does not collect Sales Tax (i.e., a seller outside of New Jersey), then the contractor should keep a fully completed Form ST-13 in his/her records to demonstrate that the purchases qualified for the exemption.

Qualifying contractor purchases include construction materials, construction supplies, and a few qualifying services, if used exclusively and entirely consumed in erecting structures or building on, or otherwise improving, altering, or repairing real property owned or leased by an exempt entity. The exemption does not extend to equipment (e.g., bulldozers, jackhammers, or computers) purchased, leased, or rented to perform the work on the real property of the Housing Sponsor. For a comprehensive list of eligible exempt purchases, refer to Technical Bulletin TB-67: Contractor Exemption for Improving, Altering, or Repairing the Real Property of Qualified Exempt Entities .

Note that the Housing Sponsors engaged in an “Affordable Housing Project” should maintain documentation that can certify that all the units of the housing project are intended for occupants with moderate, low, or very low incomes and must provide it to the Division upon request.

Purchasers (contractors) who have paid Sales Tax erroneously may request a refund of Sales Tax within four years of when the tax was paid. A Claim for Refund (Form A-3730 ) must be completed per the instructions, and submitted to the Division, along with relevant documentation to support the claim.

Questions about this notice and general Sales and Use Tax exemption information pertaining to contractor purchases may be emailed to the Division’s Regulatory Services Branch at Taxation.RegulatoryServices@treas.nj.gov.