New York State Publication 862

Department of (4/01)
Taxation and Finance SALES AND
USE TAX
CLASSIFICATIONS
OF
CAPITAL
IMPROVEMENTS
AND
REPAIRS TO
REAL PROPERTY
This Page Intentionally Left Blank
 Publication 862 (4/01)

About This Publication

Publication 862 provides contractors and their customers (property owners) sales and compensating use tax
guidance for distinguishing between a capital improvement to real property and repairs, maintenance, or
installation services to real property. For this purpose, we include a list of various activities with respect to
real property and identify them as either a capital improvement or a repair, maintenance, or installation
service.

If a contractor does a capital improvement for a customer and the customer provides the contractor with a
properly completed Form ST-124, Certificate of Capital Improvement, no sales tax is required to be collected
from the customer. On the other hand, when a contractor performs a job that constitutes a repair,
maintenance, or installation service to real property, sales tax must be collected from the customer, unless the
contractor receives a properly completed Form ST-119.1, Exempt Organization Certification, or other
applicable exemption document.

In determining whether a job is a capital improvement, please keep in mind that the installation of certain
items listed as capital improvements on the following pages may not qualify as a capital improvement if the
items are installed by a commercial tenant as a trade fixture.

As a general rule, a contractor must pay sales tax to its supplier when it purchases tangible personal property.
It does not matter whether the tangible personal property will be used in performing a capital improvement
or a repair, maintenance, or installation service.

If you have questions about the material presented in this publication, please refer to the back cover of this
publication for the appropriate address or telephone number to contact for more information.

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Table of Contents

page

Part I-General Information

Tax on building materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
Frequently used exemption documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -6-
90 day rule for exemption documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
Services to real property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
Real property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
Tangible personal property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
Capital improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7-
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8-
Repair and maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-
Installation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -9-

Part II- Listing of Capital Improvements and Repair, Maintenance, and Installation Services

Air cleaners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-

Air conditioners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-
Bathrooms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -10-
Brickwork . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
Central air conditioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
Chimneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
Decks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -11-
Doors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
Driveways, parking lots, and walks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -12-
Electrical . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -13-
Exterior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -13-
Fire, water, wind damage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
Fireplaces . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -14-
Floor coverings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
Floors and floorings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
Garage doors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -15-
Heating
electric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
electric boiler . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
electric furnace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -16-
heat pump . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
hot water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -17-
radiant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -18-
solar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -18-
steam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -18-

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Heating (cont.)
warm air duct system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -18-
wood burning furnace, boiler, stove . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -19-
Hot water heaters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -19-
Humidifiers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -19-
Kitchens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -19-
Landscaping and yard care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -20-
Masonry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -21-
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -21-
Painting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -21-
Patios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22-
Plumbing
piping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22-
sinks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22-
toilets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22-
tubs and showers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -23-
Roofs and roofing materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -23-
Septic systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -23-
Stairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -24-
Sump pumps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -24-
Swimming pools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -24-
Ventilation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -24-
Walls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -25-
Windows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -25-
Yard care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -26-
Need help? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . back cover

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Part I - General Information

Tax on building materials As a general rule, if you are a contractor or a property owner, you must pay
sales tax on your purchases of building materials, unless some exemption
applies, in which case you must provide an exemption certificate or other
document to the supplier which indicates that no tax is imposed or
required to be collected when the building materials are purchased.

Frequently used Instead of receiving a tax payment, suppliers may accept certain exemption
exemption documents documents. Examples of frequently used exemption documents and from
whom they may be accepted are:

From contractors

- Form ST-120.1, Contractor Exempt Purchase Certificate

- Form AU-297, Direct Payment Permit

From exempt organizations

- Form ST-119.1, Exempt Organization Certification

From farmers and commercial horse boarding operations

- Form ST-125, Farmers and Commercial Horse Boarding Operations

Exemption Certificate (For information on the newly expanded
exemptions applicable to farmers and commercial horse boarding
operations enacted by Chapter 407 of the Laws of 1999, please see
TSB-M-00(8)S.)

From a Qualified Empire Zone Enterprise (QEZE)

-Form ST-121.6, Qualified Empire Zone Enterprise (QEZE) Exempt

Purchase Certificate (For information on sales and use tax exemptions
afforded to a QEZE enacted by Chapter 63 of the Laws of 2000,
please see TSB-M-01(1)S.)

From retailers

- Form ST-120, Resale Certificate

From New York State and its political subdivisions and the United
States and its agencies

-Government Purchase Orders

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90 day rule for exemption If you are a contractor or supplier who makes a sale of services or
documents building materials that is exempt from tax, you must have a properly
completed exemption document in your possession no later than 90
days after the service is rendered or you will be required to collect
tax and the purchaser will need to file a claim for refund of the tax with
the Tax Department.

Services to real property Services to real property are classified as either a capital improvement
or a repair, maintenance or installation service. Installation services
include the installation of tangible personal property which remains
tangible personal property after its installation.

Real property The term real property means real property, property or land as defined
in the Real Property Tax Law and includes but is not limited to:

• land and vegetation growing on the land such as trees,

shrubs, bushes, and grass;

• buildings and structures erected upon, under, or above

land, or affixed to the land;

• utility lines, wires, and poles;

• mains, pipes and tanks for conducting steam, heat,

water, oil, gas, and electricity; and

• boilers, heating, ventilating, lighting apparatus, and

plumbing.

Tangible personal property The term tangible personal property means corporeal personal property
of any nature having a material existence and perceptibility to the
human senses including but not limited to materials, tools, equipment
and supplies.

Capital improvement A capital improvement is an addition or alteration to real property that:

• substantially adds to the value of the real property, or

appreciably prolongs the useful life of the real property;

• 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 article itself; and

• is intended to become a permanent installation.

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However, the addition of a mobile home to real property is never a

capital improvement, regardless of how it is installed.

For special rules regarding when the installation of a floor covering

constitutes a capital improvement, see page 15.

In the case of a capital improvement, if you are a property owner who:

• purchases materials and supplies only and you perform

your own labor, you pay tax to the supplier on the
materials and supplies.

• purchases materials and supplies and hires a contractor

to perform the labor, you pay tax to the supplier on
the materials and supplies, but you do not pay tax to
the contractor for the labor.

• purchases materials and supplies and labor from the

contractor, you pay no tax.

In the case of a capital improvement, if you are a contractor who

purchases materials and supplies, you pay tax to the supplier and you
do not collect any sales tax from your customer.

Leasehold improvements As a general rule, additions or alterations to real property for or by a

tenant with respect to leased premises are presumed to be temporary in
nature. Consequently, they do not qualify as capital improvements.
However, these additions or alterations may qualify as capital
improvements if there is a demonstrated intention to make them
permanent (assuming the other qualifications are met). For example,
an intention of permanence would be demonstrated by a provision in
the building lease indicating that immediately upon installation title to
the installation vests with the lessor and the installed property is to
remain with the premises after the termination of the lease.

If a lease does not contain these provisions, other factors such as the
nature of the installation, or written agreements other than a lease
provision may be considered in determining the intention of the parties
with respect to the permanence of the installation. Please see TSB-M-
83(17)S for further information on leasehold improvements.

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Repair and maintenance Repair and maintenance relates to keeping real property in a condition
of fitness, efficiency, readiness and/or safety or to restoring it to such
condition.

In the case of a job that constitutes repair or maintenance, if you are a

property owner who:

• purchases materials and supplies only and performs

your own labor, you pay tax to the supplier on the
materials and supplies.

• purchases materials and supplies and hires a contractor

to perform the labor, you pay tax to the supplier on
the materials and supplies and to the contractor for
the labor.

• purchases materials and supplies and labor from a

contractor, you pay tax to the contractor on the total
charge.

In the case of a job that constitutes repair or maintenance, if you are a

contractor who:

• purchases materials, you pay tax to the supplier, even

though you are also required to collect tax from your
customer. However, you are entitled to a refund or
credit of the tax that you paid on the materials that you
transferred to the customer.

• purchases supplies, you pay tax to the supplier.

Installation Installation services are services related to setting up tangible personal

property or putting it in place for use.

If you are a contractor who installs items such as washing machines,

clothes dryers, dishwashers, refrigerators, furniture, etc., which when
installed or placed in real property do not become part of the real
property, you must collect tax on your charge for the installation. The
individual charge for any of these items is also taxable as the sale of
tangible personal property.

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Part II - Listing of Capital Improvements and

Repair, Maintenance, and Installation Services

Capital improvement* Repair, maintenance, or

installation

Air cleaners Installation of central air cleaner systems Repair or replacement of the following in self-
contained or central units:
Original installation of ductwork or required  collector plates
additional ductwork  electronic plates
 filters
 power boxes
Replacement of complete central air cleaner  return air ducts
units  sails
Installation or replacement of self-contained
air cleaners

Air conditioners (other than Original installation or complete replacement Repair or replacement of the following in in-
central air conditioning of through-the-wall mounted units window or through-the-wall mounted units:
systems)  air flow controls  fans
(see also - Central air  blowers  fan motors
conditioning)  casings  filters
 compressors  grilles
 copper tubing  motors

Installation or replacement of window air

conditioners

Bathrooms Complete remodeling of bathrooms (toilet, Installation of free-standing cabinets

(see also - Electrical, tub, and vanity)
Plumbing, and Walls) Repair of:
Complete installation or replacement  cabinets  tile
(including any necessary fixtures) of:  exhaust fans  toilets
 cabinets  toilets  faucets  tubs
(permanent)  tubs  mirrors  tub or shower
 exhaust fans  tub or shower  shower heads enclosures
 floor tiles (if enclosures  sinks  vanities
ceramic or quarry  vanities
type)  wall tiles Replacement of faucets and shower heads
 sinks
 tile (floor or wall)

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Capital improvement* Repair, maintenance, or

installation
Brickwork Construction of new or complete replacement Fixing cracks
(see also -Chimneys, of brick:
Masonry)  chimneys  stairs or steps Replacing damaged bricks
 exterior surfaces  structures
 fireplaces  walls Repointing

Sandblasting

Central air conditioning Installation of central air conditioning Maintenance contracts

(see also - Air conditioners) systems
Repair or replacement of:
Original installation of ductwork or required  blowers  excess moisture
 coils drains
additional ductwork  compressors  fans
 condenser coils  filters
Replacement of complete central air  control devices  refrigerant
conditioning units  ductwork sections  refrigerant tubes

Chimneys Addition or complete replacement of flue or Chimney cleaning

(see also - Brickwork, liner (metal or foam)
Fireplaces, Masonry) Fixing cracks
Complete replacement of chimneys
Installation of spark arrestors
Installation of new chimneys
Repair of flues

Repointing

Sealing of flashings

Repair or replacement of:

 caps  loose mortar
 damaged bricks  pots
 flashings  rain and draft
deflectors

Decks Additions to decks Cleaning of decks

(see also - Patios)
Installation or complete replacement of: Repair or partial replacement of :
• entire decks • decks
• floor of deck • floor of deck
• footings • footings
• stairs • stairs
• railings • railings

Water sealing, staining or painting of new Water sealing, staining or painting of existing
decks decks

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Capital improvement* Repair, maintenance, or

installation
Doors Closing off a doorway Addition of paneling to a door

Cutting of doorways Caulking (interior/exterior)

Installation or replacement of doors, or doors Elimination of binding or looseness

and frames, or storm doors with related
hardware Installation of the following items in an
existing door:
Painting, varnishing or staining a new door  closers  mailslots
 decorative  peepholes
moldings  thresholds
 kickplates  weather stripping

Repair of existing doors

Painting, varnishing, or staining existing

doors

Repair or replacement of:

 casing  locksets
 closers  panels
 door frames  saddles
 door knobs  screens
 glass panes  stiles
 handles  stops
 head jambs  thresholds
 hinges  top rails
 jambs  trim
 locks or latches  weather stripping

Driveways, parking lots, and Installation or complete repaving (resurfacing) Replacement of:
walks of driveways, parking lots, and walks  cobblestones
(see also - Exterior,  crushed stone
Landscaping and yard care) Original landscaping of parking lot islands  crushed stone with oil

Original installation of gravel or crushed stone Repairing and patching of holes and cracks
driveway
Replacing sections of concrete or blacktop
Original striping (line painting) on new driveways, parking lots, and walks
parking lot
Restriping, sealing, and dressing

Resurfacing of gravel or crushed stone

driveways with new gravel or crushed
stone

Maintaining or repairing of parking lot

islands, including ongoing landscaping

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Capital improvement* Repair, maintenance, or

installation
Electrical Complete wiring or rewiring of structures or Installation of a dimmer switch to replace an
the upgrading of a service existing switch

Additions to wiring systems; for example, new Repair of:

circuits  floor outlets  metal raceways
 fluorescent  multi-outlet strips
In-wall installations of electrical wiring and fixtures  outdoor lamppost
 lighting fixtures  wall boxes
communications cables in connection with  main power boxes  wall fixtures
the installation of burglar alarms or  wiring
security systems
Replacement of:
Original in-wall installations of telephone  circuit breakers  fuses
wiring, speaker wire, computer cable or
 fluorescent fixture  light bulbs
parts: (ballasts,  outlets
coaxial cable, with the exception of the starters, tubes)  receptacles
installation of telephone wiring installed  switches
by the telephone service provider, in
connection with the telephone service that
it is selling or cable television cable
installed by the cable television service
provider in connection with its service.

Original installation of:

 circuit breakers  receptacles
 outlets  switches

Original installation or complete replacement

of:
 add-on panels  main power boxes
 breaker panels  metal raceways
 ceiling fixtures  multi-outlet strips
 door bells  outdoor lamp posts
 door buzzers  wall boxes
 door chimes  wall fixtures
 floor outlets  wiring
 fluorescent
fixtures

Exterior Additions to existing structures Installation of:

(See also - Driveways,  canvas awnings
parking lots and walks, Application of siding to structures  patching cracks
Landscaping and yard care)
Complete replacement of porches Painting of existing:
 awnings
 brickwork
Construction of:  concrete
 decks  garages
 dormers  new homes Repair of louvers and shutters
 footings  new porches
 foundations  pole barns
Repair or maintenance of:
Deepening existing water wells  awnings (including canvas)
 exterior surfaces
 patios
Drilling or boring new water wells  roof decks
 water well pumps
Excavation work if for a capital improvement

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Publication 862 (4/01)

Capital improvement* Repair, maintenance, or

installation
Exterior (cont.) Insulating structures Repair, replacement, or maintenance of:
 canvas awnings
Installation of new or complete replacement of  fence pickets, posts, rails or sections
existing:  flashings
 gates
 awnings (other  fences  shingles (partial)
than canvas)  louvers  siding (partial)
 gutter and  shutters
downspout  water well pumps Excavation work - if for repair and
systems maintenance
Installation or complete replacement of Snow removal
permanent (non-floating) docks
Installation or replacement of floating docks
Complete re-siding of structures
Repair or maintenance of any dock
Painting of new structures

Fire, water, wind damage Rehabilitation of damaged structures (See Cleaning

appropriate sections for work performed.)
Deodorizing
Demolition of a building or structure
Refinishing floors

Removal of water or debris

Repainting

Replacement of broken glass

Fireplaces Installation or complete replacement of Cleaning

(see also - Chimneys, fireplaces (other than freestanding units or
Heating - wood burning inserts) Fixing cracks
furnace, boiler, stove)
Repointing

Repair or replacement of:

 ash pits  headers
 cold air inlets  hearths
 damaged bricks  lintels
 dampers  mantels
 damper controls  smoke chambers
 fireboxes  smoke shelves
 firebricks  warm air outlets
 firechambers

Installation, maintenance or repair of

freestanding fireplace unit or insert

-14-
 Publication 862 (4/01)

Capital improvement* Repair, maintenance, or

installation
Floor coverings Installation of carpet, carpet tile, carpet Installation of carpet, carpet tile, carpet
(See also-Floors and padding, linoleum and vinyl roll floor padding, linoleum and vinyl roll floor
floorings, Bathrooms, Fire, covering, linoleum tile, vinyl tile, and other covering, linoleum, vinyl tile, and other
water and wind damage) similar floor covering, as the initial finished similar floor coverings in an existing
floor covering: building, or in a building more than 6
 in the new construction of a building or months after the building has otherwise
structure; or been completed.
 in a new addition to an existing building or
structure; or
 in the total reconstruction of an existing Repair maintenance or replacement of any of
building or structure. the above floor coverings.
(The installation of floor covering under any
other circumstance is not a capital
improvement.)

Floors and floorings Installation or complete replacement of Repair, maintenance or partial replacement of
floorings such as wood floor, floating floorings such as wood floor, ceramic tile
wood laminate floors, ceramic tile floor, floor, terrazzo, marble, concrete and other
terrazzo, marble, concrete and other similar floors
similar floors
Cleaning, stripping, sanding, waterproofing,
Cleaning, sanding, waterproofing, painting, painting, staining, varnishing and waxing
staining, varnishing and waxing new existing floors
floors

Raised flooring [see TSB-M-98(2)S for more

information]

Garage doors Installation or replacement of complete garage Adjustment of spring tension

doors
Lubrication of parts
Installation or complete replacement of
electric garage door openers and controls Repair or maintenance of electric garage door
openers and controls
Painting, varnishing or staining of new garage
doors Painting, varnishing or staining of existing
garage doors
Weatherstripping

Repair or replacement of:

 cables  panels
 casings  rollers
 door frames  saddles
 door sections  springs
 glass panes  stiles
 hinges  stops
 jambs  tracks
 locks  trim

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Publication 862 (4/01)

Capital improvement* Repair, maintenance, or

installation
Heating - electric Addition to permanently installed electric Cleaning
heating systems
Maintenance contracts
Installation or replacement of permanently
installed electric heating units or systems Repair of baseboard heaters and wall heaters

Repair or replacement of heating elements

and thermostats

Heating - electric boiler Installation or complete replacement of Cleaning of electric boiler

electric boilers
Maintenance contracts

Repair or replacement of:

 automatic airvents  pressure controls
 circulators  relief valves
 controls  return lines
 drain valves  supply lines
 expansion tanks  thermostats
 heating elements

Heating - electric furnace Installation or complete replacement of Cleaning of electric furnaces

electric furnaces
Maintenance contracts

Repair or replacement of:

 blowers  low-voltage
 condensers terminals
 elements  relays
 filters  sequencers
 fuses  thermostats
 transformers

Heating - gas Installation or complete replacement of gas Cleaning of gas furnaces

furnaces
Maintenance contracts

Repair or replacement of:

 burner heads  pilot gas lines
 draft hoods  pressure regulators
 filters  safety control
 main gas valves valves
 main shutoff  safety thermostat
valves elements
 vent pipes

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 Publication 862 (4/01)

Capital improvement* Repair, maintenance, or

installation
Heating - heat pump Installation or complete replacement of heat Cleaning of heat pump units
pump units
Maintenance contracts

Repair or replacement of:

 blowers  compressors
 coils  valves

Heating - hot water Additions to hot water systems Bleeding of radiators

Installation or complete replacement of hot Cleaning

water boilers or systems
Flushing of boilers
Original insulation of new or replacement
piping systems Maintenance contracts

Repair or replacement of:

 air vent valves  pressure reducing
 boiler tubes valves
 circulating pumps  pressure-relief
 coils valves
 drain cocks  radiators
 expansion tanks  return mains
 furnace controls  risers
 main shutoff  supply mains
valves  thermostats
 piping sections  thermocouples
 water supply lines

Heating - oil Installation or complete replacement of oil Cleaning of oil furnaces or boilers
burner guns
Maintenance contracts
Installation or complete replacement of oil
furnaces or boilers Repair of oil burner guns

Original installation or replacement of oil Repair or replacement of:

tanks  air tubes  refractory firepots
 blowers  stack-control relays
 fuel lines  storage tanks
 motors  strainer pumps
 oil - level control  transformers
valves

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Publication 862 (4/01)

Capital improvement* Repair, maintenance, or

installation
Heating - radiant Additions to radiant systems Cleaning of radiant systems

Complete replacement of radiant systems Maintenance contracts

Installation of radiant systems Repair or replacement of:

 balancing valves  furnace controls
 circulating pumps  returns
 coils  shutoff valves
 common returns  tanks (to trap air)
 drain cocks  thermostats
 feed lines  vents

Heating - solar Additions to permanent solar systems Cleaning of solar heating systems

Installation or replacement of permanent solar Maintenance contracts

systems
Repair or maintenance of solar heating
systems

Heating - steam Additions to steam systems Cleaning of steam systems

Installation or replacement of steam boilers or Maintenance contracts

systems
Repair or replacement of:
Insulation of piping systems  air vents  shutoff valves
 drain cocks  steam gauges
 drain plugs  steam mains
 piping (sections)  thermostats
 radiators  water gauges
 reducers  water supply lines
 safety valves  wet returns

Heating - warm air duct Additions to warm air duct systems Cleaning of warm air duct systems
system
Installation or replacement of warm air duct Repair or replacement of:
systems  angle boots  plenums
 balance dampers  plenum takeoffs
Original insulation of new or replacement duct  cold air returns  side stack takeoffs
 duct sections  starting collars
systems  elbows  supply stackheads
 endcaps  top stack takeoffs
 floor diffusers

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 Publication 862 (4/01)

Capital improvement* Repair, maintenance, or

installation
Heating - wood burning Installation or replacement of wood burning Cleaning of wood burning furnaces, boilers
furnace, boiler, stove furnaces or boilers and stoves
(see also - Fireplaces)
Original installation of wood burning stoves Maintenance contracts
(Including strengthening floors and
fireproofing walls and floors) Replacement of wood burning stoves

Repair and maintenance of wood burning

furnaces, boilers or stoves

Hot water heaters Installation or replacement of hot water Cleaning of hot water heaters
heaters
Maintenance contracts

Repair or replacement of:

 anode rods  inlet-outlet pipes
 burners  outlet pipes
 casing covers  tank linings
 connectors  temperature
 drain pipes control knobs
 drain valves  temperature-
 draft diverters pressure relief
 flue baffles, bodies valves
or collars  thermocouples
 glass inner tanks  thermostats
 heating elements

Humidifiers Installation or complete replacement of Cleaning of humidifiers

permanently installed humidifiers
Maintenance contracts

Repair or replacement of:

 evaporator pads  motors
 fans  trays

Kitchens Installation or complete replacement of: Installation of ductless hoods

(see also - Electrical,  built-in  countertops
Plumbing, and Walls) dishwashers  ducted hoods Installation of free-standing appliances
freezers  exhaust fans
ranges  garbage disposals
refrigerators  kitchen cabinets Painting, varnishing or staining of existing
ovens  sinks kitchen cabinets
 water softeners
Repair or maintenance of:
Painting, varnishing or staining of new  cabinets  freezers
kitchen cabinets  countertops  garbage disposals
 dishwashers  ovens
Complete reconditioning of kitchen cabinets  ducted or ductless  ranges
hoods  refrigerators
 exhaust fans  sinks`
 faucets

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Publication 862 (4/01)

Capital improvement* Repair, maintenance, or

installation
Kitchens (cont.) Replacement of:
 cabinet doors  portable
 faucets dishwashers
 portions of freezers
countertops ranges
 portions of refrigerators
cabinets

Landscaping and yard care Original installation or complete replacement Application of fertilizers, herbicides and
(see also - Driveways, of: pesticides
parking lots, and walks,  fences (permanent)  lawns or complete
Exterior)  flagstone walks sections* of a lawn Installation of free standing fountains
patio block or other  ponds (permanent)
types of walks  retaining walls
 fountains (except  rock gardens Installation of temporary or moveable ponds
free standing)  underground lawn
 gates sprinkler systems Maintenance contracts

Planting or replacing perennials Mowing of lawns

Planting or replacing of shrubs and trees Planting of annuals

Original installation of gravel or crushed stone Pruning, winter banking, fertilizing of trees
paths and shrubs

Original installation or complete replacement Removal without replacement of trees or

of concrete and blacktop sidewalks shrubs (when not part of a capital
improvement project)
Resurfacing of blacktop sidewalks
Repair of walks; adding stone, replacing
* A “complete section” of a lawn is a section damaged patio blocks or bricks, releveling
surrounded by driveways, buildings, walks, repairing cracks in concrete
walks, structures or other barriers which
divide it from other sections of lawn. Repair of fences and gates

Repair or replacement of the following in

underground lawn sprinkler systems:
 centrifugal pumps
 pump controllers
 remote control valves
 sections of piping
 sprinkler controllers
 sprinkler heads
Repairing sections of retaining walls

Replacement of fence fabric

Reseeding or overseeding of lawns

Sodding bare spots

Straightening or repairing retaining walls

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 Publication 862 (4/01)

Capital improvement* Repair, maintenance, or

installation
Masonry Installation or complete replacement of: Repair or partial replacement of:
(see also - Brickwork, • block walls • poured concrete • block walls • poured concrete
Chimneys) • brick walls posts • brick walls posts
• footings slabs • footings slabs
• foundations sidewalks • foundations sidewalks
• walks stairways • walks stairways
walls walls

Miscellaneous Asbestos removal (when done as part of a Asbestos removal (when done as part of a
capital improvement contract) repair or maintenance contract)

Debris removal from construction sites (when Debris removal from construction sites (when
done as part of a capital improvement done as part of a repair or maintenance
contract) contract)

Fire sprinkler system installed or replaced in Installation or replacement of:

ceilings and connected to water supply attic fans mail boxes
systems (removable) (installed on wall
independent smoke or post)
or heat detectors smoke detectors
Installation or complete replacement of (battery operated)
elevators
Periodic maintenance services on elevators
Installation or complete replacement of: and escalators
attic fans central vacuum
(permanently systems Pest control
installed) suspended ceilings
fire or smoke
detectors Repair or maintenance of central vacuum
(permanently systems
installed)
Repair or maintenance of elevators
Installation of winter protection, temporary
heat, electric and plumbing at construction
sites

Painting Painting of new buildings, structures, or Painting or repainting of existing buildings,

additions structures, or parts thereof

Painting of any new additions or installations

that constitute capital improvements

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Publication 862 (4/01)

Capital improvement* Repair, maintenance, or

installation
Patios Installation or complete replacement of: Painting, varnishing or waterproofing existing
(see also - Decks)  blacktop patios  patio roofs patios
 concrete patios  wood patios
 flagstone, block or Repair or maintenance of patios
brick patios

Painting, varnishing or waterproofing new Repairing and patching of holes or cracks

patios
Replacing sections of concrete patios

Replacement of blocks and flagstones

Plumbing - piping Additions to piping systems Repair of pipes and fittings

Excavation required for installation or Repair of sprinklers, water softeners and well
complete replacement of piping systems pumps

Original insulation of new or replacement Repair or replacement of:

piping systems  air chambers  shutoff valves
 cabinets  storage tanks
Installation or complete replacement of:  relief valves  traps
 garbage disposals  water softeners Thawing frozen pipes
 piping systems  water pumps
 sprinkler systems
Unclogging of main drain pipes

Plumbing - sinks Installation or complete replacement of sinks Repair or replacement of:

and necessary sink fittings  aerators  inlet seals
 bottom cages  locknuts,
 couplings connectors
 diverter assemblies  packing nuts
 escutcheons  seats
 faucets  spouts
 handles  spray heads
 handle assemblies  stems
 hose assemblies  traps
 hose guides  washers

Unclogging of sink drains

Plumbing - toilets Installation or complete replacement of toilets Cleaning

and necessary toilet fittings
Repair or replacement of:
 float arms/balls  tank drains
 flush handles  toilet seals
 guide arms  toilets seats
 inlet valves  trip sleeves
 lift wires  tubes
 plungers  valve seats
 tank balls  washers

Unclogging of toilet drains

-22-
 Publication 862 (4/01)

Capital improvement* Repair, maintenance, or

installation
Plumbing - tubs and showers Installation or complete replacement Cleaning
(including necessary fittings) of:
 Shower stalls Repair of enclosures
 Tubs
 Tub enclosures Repair or replacement of:
 automatic diverters  retainer clips
 cartridges  shower bases
 ears  shower heads
 faucets  stems
 faucet heads  stop tubes
 handles  traps
 red flats  washers

Unclogging of tub-shower drains

Roofs and roofing materials Complete replacement of a roof or roofing Application of roof coating or resaturants to
materials (entire building), or the complete existing roofs
side of a peaked roof, or the complete roof
or roofing materials on a wing, turret, Cleaning and repairing of all types of roof
dormer, etc. systems, gutters, downspouts, drains, etc.

Installation or replacement of complete gutter Repair or spot replacement of all types of

and downspout systems roofs or roofing materials (asphalt, shingle,
slate, tile, built-up, metal, single ply)
Original installation of all types of roof
systems including accessories Repair or replacement of the following items
or accessories:
 copings  louvers and screens
 cornices  metal or
 drip edges composition
 electric heating valleys
tape  metal ornaments
 expansion joints  metal stacks
 flashings (all  rain and draft
types) deflectors
 gravel stops and  shingles (all types)
fascias  skylights and
 gutter and scuttles
downspout  snow guards
systems (partial)  snow slides
 heating cables  ventilators

Septic systems Excavation required for installation Cleaning or pumping out of septic tank

Installation or complete replacement of: Excavation required for repair or maintenance

 distribution boxes  lines
 dry wells  seepage pits Repair or maintenance of:
 grease traps  septic tanks  distribution boxes  lines
 leach fields  dry wells  seepage pits
 grease traps  septic tanks
 leach fields

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Publication 862 (4/01)

Capital improvement* Repair, maintenance, or

installation
Stairs Installation or complete replacement of sets of Eliminating squeaks
stairs or staircases
Painting, varnishing or staining of existing
Painting, varnishing or staining of new stairs stairs
or staircases
Repair or replacement of:
 balusters  termite damage
 handrails  treads
 newels  wet and dry rot
 risers

Tightening of loose balusters

Sump pumps Digging of sump pump holes Installation or replacement of portable sump
pumps
Installation or complete replacement of
permanent sump pumps Repair or replacement (in permanent or
portable sump pumps) of:
 electrical cords  piping and
 floats connectors
 motors  pump suction heads
 shutoff switches

Swimming pools Installation of in-ground swimming pool, Installation or replacement of:

including excavation work done in • above ground swimming pool including
connection with the installation excavation work done in connection with
the installation
• pumps, filters etc.
Original installation or complete replacement • heater for above ground swimming pool
of:
• heater for in-ground swimming pool Repair or maintenance of above ground or in-
• liner for in-ground swimming pool ground swimming pool, including:
• cleaning
• repairing of liners
• repairing pumps and heaters

Ventilation Installation or complete replacement of Installation or replacement of portable attic

permanent: fans
 attic fans  roof vents
 exhaust fans  soffit vents Repair, maintenance or replacement of the
 gable vents  wind turbines following in permanent or portable attic or
exhaust fans:
 bearings  motors
 blades  shutters

-24-
 Publication 862 (4/01)

Capital improvement* Repair, maintenance, or

installation
Walls Baseboards and trim installed in connection Cleaning
with paneling walls
Fixing nail pops
Baseboards and trim installed on new or
completely replaced walls Painting of existing walls (including murals)

Complete paneling of new or existing walls Patching cracks

Finishing of new or completely replaced walls Regrouting of ceramic tile

Installation or complete replacement of tile Repair of:

walls  dents  termite damage
 split wallboard tape  wet and dry rot
Installation or complete replacement of a wall
Replacement of:
Original insulation of new or completely  ceramic fixtures
replaced walls  damaged ceramic tiles
 existing baseboards, molding, trim
 wallboard panels
Painting of new or completely replaced walls  wood panels
(including murals)
Stopping water leaks
Removal of a wall

Wallpapering of new or completely replaced Taping of existing walls

walls
Wallpapering of existing walls
Waterproofing new or completely replaced
walls

Windows Application of window film or coating in Applying putty, window film or coating to
connection with original installation or existing windows
complete replacement
Caulking of existing windows
(interior/exterior)
Caulking of new or completely replaced
windows
Eliminating sticking
Installation or complete replacement of
Installation of:
permanent combination storm windows
 drapery rods/  valances
hardware  Venetian blinds
Installation or complete replacement of  shades  window quilts
complete windows (frames and sashes)
Lubricating sashes
Painting, varnishing or staining of new or
completely replaced windows Painting, varnishing or staining of existing
windows
Installation or complete replacement of
permanent window shutters Repair of:
 broken glass  window frames
 termite damage  window sills
 wet and dry rot
 windows

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Publication 862 (4/01)

Capital improvement* Repair, maintenance, or

installation
Windows (cont.) Replacement of:
 aprons  sash weights
 balances  sash weight
 frames pulleys
 hardware (latches,  side casings
handles, locks,  side jambs
etc.)  stools
 inside stops  storm windows
 parting strips panes or screens
 pocket covers  window frames
 sash balances  window panes
 sash cords (glass or plastic)
 sash stiles  window sills
 yoke or head jambs

Weatherstripping

Yard Care
(See - Landscaping and yard
care)

* Items characterized in this Part as Capital Improvements will not qualify as capital improvements if they are
installed for a tenant and the lease provides that they must be removed at the end of the lease if the item is otherwise
intended not to be permanently installed. Please see “Leasehold improvements” on page 8 of this publication.

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Publication 862
(4/01)

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