LOL, Chris!
I can see the logic of not taxing labor when it involves installing a part in a car or fixing a boiler (although I'm not positive that this is the case in NJ.) But when your labor results in a product, such as a wooden cabinet or a stained glass window or a decoy or a painting, the idea of charging only for the materials doesn't make sense.
I have also heard that when an artist has a proven track record - a history of sales at a certain price level - it's permissable to claim a donation for the full value of the piece rather than the materials. However, since I'm not a tax lawyer and don't even remember where that came from, I can't be sure of this.
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