When is a painting contractor in NYS suppose to charge sales and use tax? A legitimate painting company working in New York will be licensed, have a tax i.d number, have a federal employee i.d number, and have insurance. Ask your potential house painter if he can show you valid proof of all of these. If the painting company can not show you documentation that they are a legal company to work in NY, then do not hire them, as there can be problems down the road.
If you are a non profit organization then you will be tax exempt and not have to pay NYS Sales and Use Tax on your painting project. You will have to show proof to the painting contractor that you are tax exempt and he probably will want to make a copy for his records.
New York State does require that a house painter charges sales and use tax on all materials and labor that is going to be used in a painting/staining/coatings project that is not a capital improvement. Painting the interior-exterior of your N.Y home or business is considered repair, maintenance, and installation services, and these are considered taxable. Any surfaces that are pre-existing and have been coated, painted before are taxable according to NYS Tax guidelines.
A capital improvement project is not taxable. This is usually a new construction building or addition that will be painted and has never been painted before. If you have a capital improvement project you are responsible to provide the painting contractor with proper documentation. Once providing the painter with proper documentation you are not subjected to paying taxes on any interior or exterior painting/staining/coatings that will be applied to that project. If you do not provide the contractor documents the painting company will probably charge you NYS Sales and Use Tax to protect themselves. They will want to also copy your documentation for there records.
When you construct a capital improvement, you don't pay sales tax, but if a job is considered a repair, maintenance, or installation service, you pay sales tax on the total amount for materials, supplies, and labor (unless you furnish a valid exemption certificate).
New York law defines a "capital improvement" as an addition or alteration to real property that:
1. Substantially adds to the property's value or appreciably prolongs its useful life
2. Becomes part of the real property or is permanently affixed to the real property so that removal would cause material damage to the property or the article itself
3. Is intended to become a permanent installation.
Repairs and maintenance involve keeping property in a condition of fitness, efficiency, readiness and/or safety or restoring it to that condition. Installation means setting up tangible personal property or putting it in place for use.
Always check your painting contractors documents. Make sure they are working legally and charging NYS Sales and Use Tax accordingly.
Every county in New York state has a different sales and use tax rate. Albany County, Columbia County, Green County, and Ulster County are 8%.
Sales and Use Tax, Classifications of Capital Improvements and Repairs to Real Property
Certificate of Capital Improvement
Kellogg's Painting Company provides house painters, custom staining, pressure washing services, and deck restoration contractor to homes and business in the Hudson Valley and Catskills, New York areas.