The ‘Capital Improvement Trap’ Is Back In Full Force, And That Means More Audits
In the News
2.13.19 | BERDON LLP | Bisnow New York
Picture this: an owner is renovating part of his or her building. A contractor approaches the owner and says they can release the owner from having to pay sales tax on the renovations thanks to New York’s capital improvement exemption. The owner issues an exemption certificate, and the renovations get made. Everybody walks away happy. Then comes the audit, sometimes referred to as the “capital improvement trap.” It is one of the more tricky areas of sales tax. It comes down to what counts as an exempt capital improvement versus a taxable repair or maintenance. And it can get very fuzzy in there.
This article originally appeared in Bisnow.