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New Jersey Sales Tax Guide

By Cristina Garza

New Jersey is a quintessential American state. The birthplace of luminaries like Frank Sinatra, Bruce Springsteen and Queen Latifah, New Jersey is also where baseball was first played. With a bustling and urban population [the most population dense state in the country!], New Jersey has much bounty to offer. If you’re one of the many small business owners proud to call New Jersey home, you’ll obviously need to be sure your business complies with New Jersey's sales tax laws. Fuhgeddaboutit! We have assembled this all-in-one guide for sales tax so that you can meet the sales tax compliance requirements for a small business in New Jersey. 

After reading this guide, you will have learned:

  • How to be prepared for your call with the New Jersey Department of Taxation.
  • How to contact the New Jersey Department of Taxation.
  • When to charge sales tax in New Jersey.
  • What goods, products, and services are taxable in New Jersey.
  • When you establish a sales tax nexus with the state of New Jersey, and the nuances of various thresholds.
  • How to register for a sales tax license in New Jersey.
  • How to collect sales tax in New Jersey.
  • How to file and pay sales tax in New Jersey.

If, after reading, you still have any questions to help you determine your tax sales obligations in New Jersey and how to fulfill them, we are here for your small business bookkeeping needs! 

 

 


New Jersey Sales Tax Contacts

New Jersey Sales Tax Contacts

✅  Do you need to get in touch with the New Jersey Department of Taxation?

✅  Are you uncertain about whether to visit, call them, or contact them through their website?  

✅ Do you wonder what information you should have ready before you contact them?

 

If you answered “Yes” to any of these questions, please read onward, as we have just the information you need! :)

The New Jersey Department of Taxation is reachable by phone at 609-826-4400. 

You can also send them a message via their website visit one of their Regional Information Centers, but they don’t have any way to send an email or message. If you are hoping for the fastest response, our suggestion is that you call rather than visit in person. 

When you do call the New Jersey Department of Taxation, you will want to have some information on hand. It will save time to have the following information easily accessible before you call: 

  • Taxpayer Name
  • EIN
  • Sales & Use Tax ID Number

If you plan on having a third party contact the NJ DOT on your behalf, you’ll want to be sure to have completed a power of attorney form (m5008r, PDF). If you don’t have a completed form they won’t be able to assist someone else on your behalf.

If you have any more questions, please feel free to contact us so we can assist you with your sales tax needs.

 

 


New Jersey Sales Tax Registration

New Jersey Sales Tax Registration

 

Are you a new business selling tangible property in New Jersey? If yes, you are going to want to register your business with the New Jersey Department of Taxation so that you can pay your sales tax on time. 

You need not fret as this is a relatively simple process and one for which you’re about to be fully prepared. We are going to outline the steps below so you are totally ready to register for your sales tax license.

 

Here we go! Remember...

Preparation is key. 

Let’s get started!

 

 

How do I register to collect sales tax in New Jersey?

You can apply or register for a New Jersey sales tax permit by visiting the New Jersey DOR Tax Portal website and following the instructions provided.

New Jersey also has an old school paper based form (PDF) you can print and mail in, but this is going to be a slower setup and with greater possibility for errors. We don’t recommend it, and New Jersey discourages it on their website, but we wanted to make the option available in case it suits the needs of someone out there. 

 

 

What information do I need to register for a New Jersey sales tax permit?

Great question!

Before you sign up for New Jersey sales tax permit you’ll want the following information on hand:

  • Business name
  • Business entity type 
  • Description of business activities
  • Date business activities began or will begin
  • Business address and mailing address
  • Business contact information
  • Associated business entities 
  • NAICS code that best matches the business
  • Federal Employer Identification Number (FEIN)
  • List of business officers, partners, managing members, and/or trustees

Don’t forget! Preparation is key. When you have all this information ready, you can go online and register for your permit at the New Jersey Tax Portal website

 

 

How much does it cost to register for a New Jersey sales tax permit?

Zip! Zero! Zilch! :] The state of New Jersey doesn’t charge a penny to register for a new sales tax permit.

 

 

Do I need a Federal Tax ID Number or EIN to register for a New Jersey sales tax permit?

Indubitably, yes! You will most assuredly need one, but if you don’t already have one and need to get a new EIN, it’s a painless process. You can register for a Federal EIN right here :). 

 

 

Which agencies in New Jersey do I need to additionally register with?

You may need to check with some of the following agencies or resources: 

You’ll want to give this some thought and do a little research or investigating; since every business is unique, and there are such different rules, regulations, and laws that may apply. 

We suggest contacting the New Jersey Department of Taxation to verify which additional government agencies you may be required to register with. 

 

*****

 

Huzzah!!!

You are now prepared to register for your New Jersey sales tax permit in New Jersey. 

Let’s summarize what we have covered:  

  • Have all the required information easily accessible before registering online.
  • Acquire a tax ID or EIN before registering for a New Jersey sales tax permit.
  • Register online at the New Jersey Tax Portal website.
  • Look into what other agencies you may have to additionally register with.

Registering for your New Jersey sales tax permit will be stress free as long as you are prepared. We recommend organizing all the essential information in a folder, preferably using a system like Box.com or Dropbox (something we’re happy to handle for our customers). 

 


New Jersey Sales Tax FAQ

New Jersey Sales Tax FAQ 

By now, you may have already contacted the New Jersey Department of Taxation and applied for a New Jersey sales tax permit. 

Once you have a license to collect and remit sales taxes in New Jersey, you will probably be asking yourself two questions: 

  • When do I charge a sales tax in New Jersey?
  • What goods and services are subject to sales taxes in New Jersey? 

We are going to go over some common questions that our clients have asked. We believe these questions will help you appreciate the nuances of taxable goods so you can be confident in fulfilling your tax obligations. 

Let’s start with the first question…

 

What goods and services are considered taxable in New Jersey?

The following items are all taxable in the state of New Jersey: 

  • Sales of tangible goods at retail.
  • Repairs or alterations of tangible personal property.
  • Property rentals, leases, or licenses [e.g. commercial, mini-warehouse]
  • Selling service warranty contracts.
  • Short-term rentals for living accommodations (e.g. motel/hotel, beach houses, condos, timeshares, vacation homes, or RV homes).
  • Rental/lease of personal goods (e.g.: machinery, vehicles, equipment, or other property).
  • Charges for admission to any place of amusement, sport, or recreation.
  • Manufacturing or producing goods for retail sales.
  • Operating vending machines or amusement rides.
  • Services are mostly exempted (janitorial services are taxed)

 

 

The bottom line is …

Your business must pay taxes on sales of any non-exempt goods, and some taxable services.

 

*****

 

Let’s now review some of our clients’ frequently asked questions:

  • Is New Jersey an Origin or Destination sales tax State?
  • What creates a sales tax nexus in New Jersey?
  • What is the economic threshold in New Jersey?
  • Does Amazon have fulfillment centers in New Jersey?
  • Does New Jersey have a Click-Through Nexus?

To best understand your tax obligations, new businesses need to consider how they are doing business and the type of relationships they have with buyers and any third parties to their transactions. 

 Let’s discuss some questions that will help you understand the nature of your small business and the subsequent tax implications.   

 

 

Is New Jersey an origin or destination-based sales tax state?

Neither, sort of; New Jersey has a single state-wide rate that is charged no matter where the buyer or seller are.

 

 Protip: Charge the customer the same rate no matter where they (or you) are in New Jersey.

 

What creates a tax nexus with the state of New Jersey?  

Having nexus, also known as "sufficient business presence,” with New Jersey means your business has established a taxing connection with a state. When this happens, you are required to collect and remit sales tax in New Jersey because you created a sales tax Nexus.

Even if your business maintains its main headquarters in another state, you may still have to charge and pay sales tax to the New Jersey Department of Taxation even if you never step foot in New Jersey.   

So, how do you create a sales tax Nexus in New Jersey?

 

What creates sales tax nexus?

 

A business establishes a nexus in New Jersey by:

  • having a business location in New Jersey;
  • having property stored in New Jersey;
  • employing any person in New Jersey;
  • contracting with a salesperson or other agent in New Jersey;
  • leasing equipment used in New Jersey;
  • performing services in New Jersey;
  • licensing the use of intangible property in New Jersey, or transporting property in New Jersey using the taxpayer’s vehicles.

Let’s talk a bit more specifically about where your goods are stored, such as in the instance of an Amazon warehouse. 

 

 

Does Amazon have fulfillment centers in New Jersey?

Yes, heaps! At the time of this article’s publication:

  • 50 New Canton Way //  Robbinsville NJ  // 08691
  • 275 Omar Ave //  Avenel NJ  // 07001 
  • 8003 Industrial Ave //  Carteret NJ  // 07008-3445
  • 380 Middlesex Ave //  Carteret NJ  // 07008-3445
  • 3170 State Route 27 //  Edison NJ  // 08817-3332
  • 2651 Oldmans Creek Rd //  Logan Township NJ  // 08085-4503
  • 22 Highstown-Cranbury Station Rd // Cranbury Township NJ  // 08512-5013
  • 240 Mantua Grove Rd  // West Deptford NJ // 08066-1731

 

This is relevant if you sell your products on Amazon or are recognized as an Amazon FBA (Fulfillment by Amazon) seller. When Amazon stores your products in one of its fulfillment centers in any state, including Minnesota, this triggers a sales tax requirement. If Amazon is storing your products in a warehouse in Minnesota, you have created a taxing connection with the state of Minnesota.

We can help guide your small business through this! We use tools like A2X and Wherestock to identify where our clients' inventory is currently being held and shipped from so that we can keep them in compliance.

 

 

Does New Jersey have economic nexus?

Yes, New Jersey now has an economic nexus law. As of November 1st, 2018 remote sellers are liable to pay sales tax beyond a certain threshold. This means that even businesses without a physical presence or traditional nexus can be required to register for, collect, and pay sales taxes.

The threshold for registering is having a cumulative gross revenue of over $100,000 to New Jersey purchasers or over 200 transactions.

For  more information see the New Jersey DOT’s remote sellers page here.

 

 

Does New Jersey have click-through nexus?

Yes! This means if you’re an affiliate sales or third party marketer, you may have a tax liability even if you don’t meet nexus another way. If revenue exceeds $10,000/quarter four quarters in a row, affiliate marketers will need to register for and pay sales tax. For more information, NJ DOT issues this PDF about click-through nexus.

 

 

Is New Jersey a streamlined sales tax state?

Yep! Since October, 2005 New Jersey has been a full member of Streamlined Sales Tax.

If you are planning on taking advantage of the Streamlined Sales Tax as a business, it is recommended you use a Certified Service Provider though businesses may opt to register themselves without a CSP. Ultimately the aim of streamlined sales tax is to simplify payment to multiple different states of sales and use tax. It isn’t required that you utilize them, but it can significantly reduce complexity to do so, especially if your business sells in multiple states.

 

More effectively manage your tax needs by keeping this guide handy. 

You and your business can be better equipped to avoid situations like paying fines, paying back taxes that you did know you had to pay in the first place, or facing an audit by the tax authorities in New Jersey.

 


Collecting Sales Tax in New Jersey

Collecting Sales Tax in New Jersey

By now you know if you are a business that has established a nexus with New Jersey. So you have an understanding about whether, or when, you are required to collect sales tax. Knowing this is just half the battle! Now, we are going to help you with the next half of the battle: how to navigate the process of collecting taxes.

Let’s review some common questions our clients have asked regarding their New Jersey Sales Tax obligations. 

  • How do I collect New Jersey Sales Tax?
  • Who is eligible for New Jersey Sales Tax exemptions?
  • What should I do if my customer is exempt from sales tax in New Jersey?
  • What happens if I lose a New Jersey nontaxable transaction certificate? 

After reading this, you will be better equipped to determine when --and when not-- to collect sales tax in New Jersey.

 

 

How do I collect New Jersey Sales Tax?

As we mentioned above, New Jersey mostly has a single rate for the whole state state, so you’ll want to collect the same amount irrespective of the purchasers or your business location. Your point-of-sale software should make this relatively simple. There are a few exceptions where the rate is halved [“Urban Enterprise Zones”] or a surtax is added [Atlantic City, Cape May county]. For more details on the exceptions to the state-wide rate, click here

 

 

What are the current New Jersey Sales Tax rates?   

New Jersey’s state-wide sales tax rate is 6.625% at the time of this article’s writing, with no local surtaxes adding to that amount. Since sales tax rates may change, we shall refer you to check out the New Jersey Department of Taxation tax rate lookup page. Any change will be reflected on that page.

It always helps to be accurate and up to date with this type of information! :) 

 

 

What is exempt from New Jersey Sales Tax?

What is exempt from sales tax in New Mexico

 

Here is a sample list of exemptions: 

  • Purchases for resale
  • Everyday clothing items
  • Medical supplies
  • Groceries 

New Jersey does not have many exemptions beyond the standard ones, but they do offer a complete list of exempted items (PDF).

 

 

Who are eligible for New Jersey Sales Tax exemptions?

At this point, you should know what products are exempt from sales tax in New Jersey. You also want to know who may be exempt. 

Under New Jersey law, the type of buyer or the way the goods will be used can qualify can buyer for a sales tax exemption. A good example of this is a merchant purchasing goods for resale, aka a wholesaler.

Other common examples of an exempt buyer may include:

  • Government agencies
  • Non-profit organizations
  • Religious groups
  • Out-of-state buyers (should their business not have nexus in their home state).

Note that a non-profit or contractor status doesn’t necessarily immediately confer tax exempt status. To learn more about this, click here (PDF).

 

 

What should I do if my customer is exempt from sales tax in New Jersey?

Purchasers who are tax exempt must have completed resale certificate (PDF) and must present their completed exemption certificate at the time of purchase. It is then incumbent upon the seller to hold on to this exemption certificate. Failure to do so may leave you unable to justify tax exempt sales.

Remember, you always want to collect and file a copy of the exempt certificate. Such certificates must be produced upon request in the event of an audit to justify tax-exempt sales.

 

 

What happens if I lose a New Jersey Sales Tax exemption certificate?

Hmm... Obviously this issue is best to be avoided! Imagine finding out you’ll be audited and discovering you cannot produce an exemption certificate for a buyer! That nightmare scenario would mean you could be held liable to pay all taxes on behalf of the buyer. This is a bad scene and can be avoided by taking proper care with your paperwork… which happens to be one of our specialties! :) 

 

 

Does New Jersey have a sales tax holiday?

No, unfortunately they offer nary a day’s respite! :\

 

***** 

 

We have now covered who you need to collect sales taxes from, how to determine whether goods for sale are deemed taxable, what goods and services fall under tax exemptions, who is eligible for tax exemption certificates, and, finally, the process of collecting sales tax in New Jersey state. 

Now that we’re this far down the rabbit hole there’s only one thing we need to learn about next… how to pay the piper! 

 

 


Filing and Paying Sales Tax in New Jersey

Filing and Paying Sales Tax in New Jersey

It is time to talk about filing and paying your sales taxes in New Jersey. In this section, We are going to cover the following frequently asked questions from our clients:

  • When is New Jersey Sales Tax due?
  • What are the New Jersey Sales Tax thresholds?
  • What if a New Jersey Sales Tax filing date falls on a weekend or holiday?
  • How do I file a New Jersey Sales Tax Return?
  • How do I correct a New Jersey Sales Tax return?
  • What happens if I don’t collect sales tax?
  • What happens if I file or pay my sales tax return late?
  • Do I need to file a return if I don’t collect any sales tax in New Jersey?
  • If I close my business, do I need to file a final sales tax return?
  • Does the New Jersey Department of Taxation offer a discount for filing on time?

By the time you finish reading this, you will feel confident enough to file and pay your New Jersey Sales Tax.

 

 

When is New Jersey Sales Tax due?

New Jersey sales tax payments are due based on the filing interval. Filing intervals are based on the company’s tax liability [detailed ahead, be patient! :p] 

The state of New Jersey requires payment by no later than the 20th of the month following the reporting period

 

 

What are the New Jersey Sales Tax filing interval thresholds?

The thresholds for filing intervals are based on the expected or actual tax liability owed:

 

Average Tax Liability Owed Monthly*

Filing interval

All other filers

Quarterly

More than $500 monthly with $30,000+ preceding year

Monthly

 

*anticipated if new business, actual if existing company

 

Not sure how to determine your tax filing frequency?

You can review your eCommerce or Point-of-Sale Software to see the volume of sales you have generated. 

Don't worry though! The state will let you know when your due dates change. :) 

Keep an eye out for notices in your mail from the State of New Jersey so that you don't miss any shift in deadlines.

 

 

What if a New Jersey Sales Tax filing date falls on a weekend or holiday?

The deadline is moved to the next business day, typically the Monday following the weekend or the day after the holiday. Where possible, we always suggest filing well before the holiday, of course ;). 

 

 

How do I file a New Jersey Sales Tax return?

Paper: No offline form to file and pay in NJ! Progress :) 

Electronic: File online via New Jersey Tax portal and submit payment via EFT.

  

 

How do I correct a New Jersey Sales Tax return?

Paper: Unavailable

Electronic: Amend the return within the New Jersey Tax portal

 

 

What happens if I don’t collect sales tax?

If you were required to collect sales taxes and failed to do so for whatever reason, that’s a big no-no! Ultimately the business will be held liable for the due tax. Always be sure to collect sales tax at the point of sale. Attempting to collect after the fact will be time consuming and most likely unsuccessful. 

 

Protip: You are still responsible for remitting sales taxes even if you failed to collect them. 

 

What happens if I file or pay my sales tax return late?

New Jersey's Department of Taxation charges a penalty ranging from 5% to 25% of the tax owed, depending on how late. Additionally, $100/month additional penalty may be charged additionally on late payments.

 

 

Do I need to file a return if I don’t collect any sales tax in New Jersey?

Yepper! New Jersey requires businesses file a “Zero-Tax” return even when they have no sales during a taxing period.

 

 

If I close my business, do I need to file a final sales tax return?

Absolutely, New Jersey requires businesses to file a “Final sales tax” return when closing their doors.

 

 

Does the New Jersey Department of Taxation offer a discount for filing on time?

No soup for you! Or discounts on early filing, either :( 

 

*****

 

Now that we have covered all our bases for filing and paying sales taxes in the state of New Jersey, you should feel more at ease about the process.

 

Some things to remember:

  • Due dates are important. If anything, file and pay your taxes early.
  • There are three payment plans for filing and paying your sales taxes depending on how much you collect in sales tax on average in a month.
  • You can file and pay your taxes electronically or by mail
  • If you need to amend a return, you may do so electronically or by paper.
  • If you don’t collect sales tax and you were supposed to, you (not the buyer) is liable to pay the sales tax to the state of New Jersey.
  • You will have to pay late fees if you fail to file your tax return on time and/or if you fail to make your tax payment on time.
  • Even if you collect no sales tax, you still need to file a return.
  • You need to file a “Final sales tax report” when you close your business.

 

Now, you are ready to file and pay your sales tax in New Jersey. If you have any more questions, feel free to contact us.

  

Click here if you think sales tax is boring. Book a meeting.

 


 

Please note: This blog is for informational purposes only and the information is accurate as of 8/30/2019. If you want legal advice on sales tax law for your business, please contact a Sales Tax professional. Keep in mind that sales tax regulations and laws are subject to change at any time. While we strive to keep our blog current, this blog possibly may be out of date by the time you review it.