# Capital Improvement.....



## EMINNYS (Nov 29, 2010)

Can somebody please explain Capital Improvement to me???? I recently did an estimate on a kitchen remodel....and the homeowner replied back...." Can you tell me how much it will be if Lowes installs the cabinets"? She said that the kitchen designer at Lowes told het that she wouldnt have to pay sales tax if they installed the cabinets....
I told her that I wouldnt get involved with the project if that was the case, but I would like to know .....I really must be dumb....


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## I Mester (Aug 21, 2011)

yes. the boxes work that way. if they sell you the cabinets and they perform the labor, they look at the whole project as a capital improvement job. where the product you install becomes a part of the property, then they dont have to pay tax on the material that is installed. theres a state form homeowner has to fill out.

here's the link in ny to the ST124 form and explanations.
http://www.tax.ny.gov/pdf/publications/sales/pub862_401.pdf


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## ranteso (Nov 11, 2010)

"Can somebody please explain Capital Improvement to me????"

you're in the remodeling business and you're asking a question like that? Don't take this the wrong way, but you need to sit down with your accountant and get educated on this because it's very important.


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## EMINNYS (Nov 29, 2010)

ranteso said:


> "Can somebody please explain Capital Improvement to me????"
> 
> you're in the remodeling business and you're asking a question like that? Don't take this the wrong way, but you need to sit down with your accountant and get educated on this because it's very important.


Yes I am in the remodeling business.... for more than twentyfive years, and never came across this issue, so it cant be that important.....But thanks for your valuable answer.


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## ranteso (Nov 11, 2010)

EMINNYS said:


> so it cant be that important.....But thanks for your valuable answer.


you're very welcome,

But are you saying knowing what a capital improvement is is not important?


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## EMINNYS (Nov 29, 2010)

Ranteso,
I Called her bluff, she signed my contract today, so in this case it wasnt. And like I said , I have never confronted it before, but it would have been nice to hear your interpretation, wouldnt that have been nice?


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## eastend (Jan 24, 2006)

So, in twenty-five years of remodeling, you have never come across a sales tax issue concerning a capital improvement?

Have you ever paid sales tax on anything you do or on your sales? Or collected it from a client?

Do you know why you would do one and not the other? I'm guessing you've never has a sales tax audit; do you work with an accountant?

I also find it hard to believe you've never dealt with this issue before.


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## svronthmve (Aug 3, 2008)

eastend said:


> So, in twenty-five years of remodeling, you have never come across a sales tax issue concerning a capital improvement?
> 
> Have you ever paid sales tax on anything you do or on your sales? Or collected it from a client?
> 
> ...


I'm a contractor in NYS. 

I run into contractors all the time who don't know what a capital improvement form is.

What most ignorantly don't know is that if they get audited & don't have a signed form on file from their customer, they as the contractor are responsible to pay the tax themselves - even if it is a legitimate capital improvement.

NYS has an extensive booklet that tells you what are/are not considered each type.

My recommendation is that the OP & others better educate yourselves and soon. We're broke in NYS & they're out generating revenue every which way. 

My accountant says contractors have been audited at an extremely high rate in NYS the last couple years. Both in tax & work comp.


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## I Mester (Aug 21, 2011)

I posted the link up there to the booklet.


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## EMINNYS (Nov 29, 2010)

ISM37 said:


> I posted the link up there to the booklet.


ISM... Thanks for the useful info.... Thats what I thought this website was for... Obviously , after reading the threads I am not the only idiot out there!! I spoke to 2 of my friends this weekend, who are owners of big contracting outfits, and thankfully they were very helpful in pointing me in the right direction. 
On a side note....I love this site, there are some excellent posters out there, especially the moderators, but I really wish some of the posters were more constructive with their posts, rather than being so antagonostic.. I know its part of the forum game, to try and get a rise out of other posters, but really?? I wonder if the same posters are just as argumentative with their customers , and their families.. 
I joined the site because although I have had success with my business, I know that there is always more to learn. Some of the posters seem to know everything.....but yet dont want to share there knowledge....Why join the site then???? Just to rant?


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## Ethos (Feb 21, 2012)

I agree. There's no need to be rude just to make ourselves feel better about being more educated. The purpose of this site is to share information. It's very easy for stuff like this to fall through the cracks.


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## ranteso (Nov 11, 2010)

I'm straight forward, direct and sometimes sarcastic, but my tone was not to insult, degrade, condescend or be rude, I was only taken back (quite surprised) by the fact that a contractor in the business 25 years has not a clue to what a Capital Improvement is. 

In my mind that's like a carpenter asking "can someone tell me what a nail is?" 

If in fact the op truly has no knowledge of what a Capital Improvement is then he must find a qualified accountant and get some serious schooling. Believe me, not all accountants are the same and I've had a bad accountant in the past. 

It's hard for me to believe that the OP actually has an accountant because when setting up a business account with an accountant, one of the very subjects discussed is Capital Improvements and Sales Tax. 

This goes to my belief that most contractors short change themselves into believing lawyers and accountants are not nearly as important to their business as a new tool or beer.


P.S. I guess the OP didn't learn his lesson from a year ago: http://www.contractortalk.com/f16/sales-tax-94153/


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## EMINNYS (Nov 29, 2010)

ranteso said:


> I'm straight forward, direct and sometimes sarcastic, but my tone was not to insult, degrade, condescend or be rude, I was only taken back (quite surprised) by the fact that a contractor in the business 25 years has not a clue to what a Capital Improvement is.
> 
> In my mind that's like a carpenter asking "can someone tell me what a nail is?"
> 
> ...


Ranteso, Thanks for being so straight forward, you are a gentleman. Also thanks researching my posts, and reminding me that almost a year ago to the day I basically asked the same question. Before you researched all of my posts and reminded me , I had completely forgotton that I had previously inquired about capital improvements. Thanks to you I was reminded that I need to get my sht together(as I admitted in last years post, but yet did not follow through on) The fact is I actually had no memory of those posts until you reminded me. 
My next question is ...... Since you are the almighty straight forward know all contractor, why is it that you have time to research someone elses posts, and then reply to a post at 1100 in the morning? You must be really busy with your projects to be able to find time to do that while supervising ranteso inc. 
The only reason I can imagine that I completely forgot about the previous posts is that I have been working steady 6 day weeks for the past 2 years, and in fact I am so busy I havnt even been able to get to my accountant(the one that you claim I dont have) yet this year.
Thanks again for being so straight forward..... I look forward to reading your insightful posts in the future....:thumbsup:


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## ranteso (Nov 11, 2010)

You can refer to me as Gary, but ranteso will be just fine.

I did not search or research your past posts, (why would I, unless you seriously believe I'm "Out to get ya" 

I sense in your tone if I told you how I stumbled upon it you would not believe it, but let me go ahead and try. 

Would you believe after reviewing this thread I searched for additional information on this subject? And if you google something like NYS Tax exempt certificate contractor or something like that, numerous forum threads pop up. This forum CT and many others like it contain vasts amount of information on many subjects, and the search engine goes to work without prejudice.

But the search had nothing to do with you, just searching for general information that we all do just for knowledge sake. BUT I was surprised to find it when I did. Now that's what you call a convenient coincident. Sure, I'll admit it was a stab posting it, but come on, no real malice intended.


Do I have to justify my presence here at noon or anywhere for that matter? Certainly not to you

I apologizing if my words crossed your path in a negative manner. It was not my intention. 

Don't work yourself to death and start taking two days off a week and enjoy the summer up your way. 

Be well


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## EMINNYS (Nov 29, 2010)

ranteso said:


> You can refer to me as Gary, but ranteso will be just fine.
> 
> I did not search or research your past posts, (why would I, unless you seriously believe I'm "Out to get ya"
> 
> ...


Thanks Gary, its all good, remember we are on the same team.... I am sure we probably both work too hard... NY blue collar grunts....working for our families, and the "takers".....Now let me get back to printing these "Capital Improvement Forms":clap::clap:


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## ranteso (Nov 11, 2010)

Good on all (Erik?) 

Just attach them to all your contracts, this way you get them signed from the start and you're not scrambling to find them if you're so lucky to win the NYS tax audit lottery.

And no joke about taking two days off, I've worked 7 days a week at one point in my life and that is the only thing I regret in my life. I can't get that precious time back.


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## TheItalian204 (Jun 1, 2011)

we dont have capital improvement here...we do have embetterment...you still charge sales tax they charge you and customer recieves deduction on whole project from tax return.


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## jhark123 (Aug 26, 2008)

Here in Washington it's simple, you always pay sales tax on everything, everytime! I even have to pay sales tax on rented equipment while the customer is paying tax on the total amount of the job, effectively double taxing rented equipment.


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