Contractors
Running a home improvement business in New Jersey
The State is strict about four things: registration, insurance, written contracts and sales tax. Get them right and you're ahead of most of your competition. Here's each one, from the source.
Keeping your own books? Tallyfinch does invoices, bank import and reports on your computer. See Tallyfinch
Registration and insurance
- Home improvement contractors register with the Division of Consumer Affairs every year, including part-time and out-of-state contractors. Initial registration is $110; renewal is $90 by March 31, online. (Consumer Affairs)
- You need commercial general liability insurance of at least $500,000 per occurrence, plus workers' comp unless you're exempt.
- Your registration number goes on your ads, business cards, trucks, contracts and every business document.
Contracts over $500
Must be in writing and signed by everyone, with your legal name, address and registration number, a description of the work and main materials, the total price, start and finish dates, and a copy of your insurance certificate. (N.J.S.A. 56:8-151, N.J.A.C. 13:45A-16.2) The customer can cancel for any reason until midnight of the third business day, and the contract has to say so in bold type of at least 10 points.
Sales tax: repairs vs. improvements
Repair and maintenance labor is taxable. A capital improvement is exempt when the owner gives you a signed Form ST-8. You pay sales tax on materials when you buy them either way, with narrow exceptions. (NJ Treasury S&U-3)
Subs and 1099s
Get a W-9 from every subcontractor before you pay them. For payments of $2,000 or more in 2026, send a 1099-NEC by January 31. (IRS) New Jersey's ABC test decides whether someone is really a sub.
Want the books handled?
Job costing, sales tax set aside by job type, 1099s at year end. Bookkeeping for contractors · A site that shows your registration number
Printable kit
NJ Home Improvement Contractor Compliance Kit
A contract checklist, change order log, sales tax job log for repairs vs capital improvements, a W-9 and 1099 tracker, and a registration calendar.
General information, checked November 2026. Not legal advice. MCC Solutions is not a law firm.
Questions
How much does NJ home improvement contractor registration cost?
$110 to register and $90 to renew each year by March 31, through the Division of Consumer Affairs.
How much insurance does a NJ home improvement contractor need?
At least $500,000 per occurrence in commercial general liability, plus workers' compensation unless exempt.
Do I charge sales tax on a kitchen remodel?
A capital improvement is exempt if the owner signs Form ST-8. Repairs and maintenance are taxable. You pay tax on your materials either way.
Can a customer cancel a signed contract?
Yes, for any reason until midnight of the third business day after they get a copy. The contract must tell them so.
Tallyfinch
Books you keep on your own computer
Tallyfinch does invoices, bills, bank import, reconciliation and the main reports, in a file you own. $99 once, then $5 a month for updates; the app keeps working if you stop the plan. It does not do payroll or sales tax filing. The free download records up to 60 entries.
See Tallyfinch Download it free Compare the three apps