New Jersey Sales Tax Guide for Businesses
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We wrote this guide for online sellers who want to know if they even have to bother with sales tax in New Jersey, and if so, how best to tackle the sales tax situation in the Garden State.
After reading this, you’ll know:
- Do you or don’t you need to collect New Jersey sales tax?
- Which customers do you collect from?
- How much do you collect?
- What do you do with all the sales tax you’ve collected?
- Way more than you probably ever wanted to know about New Jersey sales tax!
Do you have sales tax nexus in New Jersey?
Good news! You only have to begin thinking about New Jersey sales tax if you have sales tax nexus in New Jersey.
“Sales tax nexus” is just a fancy way of saying “significant presence” in a state.
New Jersey considers a seller to have sales tax nexus in the state if you have any of the following in the state:
- An office or place of business
- An employee present in the state
- Goods in a warehouse
- Ownership of real or personal property
- Delivery of merchandise in New Jersey
- Independent contractors or other representatives in New Jersey
- Provide any maintenance program in New Jersey
You can click here to read exactly what the New Jersey Division of Taxation (New Jersey’s taxing authority) has to say about what constitutes sales tax nexus in New Jersey.
Do you have sales tax nexus in New Jersey if you sell on FBA?
If you sell on Amazon FBA, you may have sales tax nexus in New Jersey. Storing physical products in a state can create sales tax nexus, and New Jersey is home to multiple Amazon Fulfillment Centers.
To determine whether or not you have items stored in an FBA warehouse in New Jersey, you can do one of two things:
- Login to Amazon Seller Central and pull your inventory report
- Try a 30-day free trial of TaxJar and we’ll show you the states from where your items are shipping with our Amazon badge feature
You may find that your inventory is stored in one of New Jersey’s Amazon fulfillment centers on this list:
Read here for more about Amazon FBA and sales tax nexus. Here’s a list of all Amazon Fulfillment Centers in the United States.
Do you have economic nexus in New Jersey?
Effective November 1, 2018, New Jersey considers vendors who make more than $100,000 in sales annually in the state or more than 200 transactions in the state to have economic nexus. This means the state considers these vendors obligated to collect sales tax from buyers in the state. You can read New Jersey’s economic nexus guidance for sellers here and you can read more about economic nexus in every state here.
Is what you’re selling even taxable?
You’ve probably read this far because you realized you have sales tax nexus in New Jersey. Your next step is to determine if what you’re selling is even taxable.
Services in New Jersey are generally not taxable. So if you’re an attorney or a hairdresser, you’re in luck and you don’t have to worry about sales tax. But watch out – if the service you provide gives any access to information like stock quotes or marketing trends, that information service is not sales tax exempt.
Tangible products are taxable in New Jersey , with a few exceptions. These exceptions include clothes, groceries, and prescription drugs.
So if you sell jewelry, then charge sales tax to your New Jersey customers.
But if you’re a landscaper, don’t charge sales tax to your New Jersey customers.
If you have sales tax nexus in New Jersey and your products are taxable, your next step is to register for a sales tax permit.
How to Register for a Sales Tax Permit in New Jersey
Sellers with sales tax nexus in New Jersey must apply for a New Jersey sales tax permit.
Don’t skip this step! New Jersey considers it unlawful to collect sales tax in their name without a permit. Go here for more on how to register for a sales tax permit in New Jersey .
How to Collect Sales Tax in New Jersey
So you’ve determined that you have sales tax nexus in New Jersey and what you’re selling is taxable. And you’re all set and registered for your New Jersey sales tax permit.
The next step is to determine how much sales tax to collect.
How to Collect Sales Tax in New Jersey if You are Based in New Jersey
Collecting sales tax in New Jersey is fairly easy because New Jersey doesn’t have local sales tax rates. If you have sales tax nexus in New Jersey and sell to buyers in New Jersey just charge the 6.625% state tax rate. And that’s it!
Should you collect sales tax on shipping charges in New Jersey?
New Jersey requires you to charge sales tax on shipping of taxable items. If you ship a taxable item and a non-taxable item, you will need to separate the shipping costs based on their respective weights. This way you will not have to charge sales tax on the shipping of the non-taxable item.
If you do not separate the shipping charges between taxable and non-taxable items, you will have to charge sales tax on the shipping charges you bill the customer.
Read a full explanation of sales tax on shipping in New Jersey here.
When are New Jersey Sales Tax Returns Due?
When you file and pay New Jersey sales tax depends on two things: your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in New Jersey?
States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.
In New Jersey, you will be required to file and remit sales tax either monthly or quarterly:
New Jersey sales tax returns are always due the 20th of the month following the reporting period. If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.
2018 New Jersey Monthly Sales Tax Filing Due Dates
*indicates a due date pushed back due to a weekend or holiday
2018 New Jersey Quarterly Sales Tax Filing Due Dates
*indicates a due date pushed back due to a weekend or holiday
Click here for more about New Jersey sales tax filing due dates.
How to File Sales Tax in New Jersey
When it comes time to file sales tax in New Jersey you must do three things:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
We’ll walk you through these steps.
How to Calculate How Much Sales Tax You Owe in New Jersey
Calculating how much sales tax you should remit to the state of New Jersey is easy with TaxJar’s New Jersey sales tax report.
All you do is connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your New Jersey sales tax return will be waiting for you in TaxJar. All you have to do is login!
How to File and Pay Sales Tax in New Jersey
You have three options for filing and paying your New Jersey sales tax:
- File online File online at the New Jersey Division of Taxation. You can remit your payment through their online system. Check here ofr our step-by-step guide to filing a New Jersey sales tax return.
- File by mail You can use ST-50 and file and pay through the mail.
- AutoFile Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations or filling out complex sales tax returns.
Other Facts You Should Know about New Jersey Sales Tax Filing
There are a few more things you should know about sales tax in New Jersey:
Penalties:
- The late filing penalty is 5% of the tax due for each month or part of a month the return is late. The maximum penalty for late filing is 25%. A penalty of $100 for each month the return is late may also be charged.
- A late payment penalty of 5% of the tax due may also be charged.
- Interest is calculated at the annual rate of 3% above the prime rate for every month or part of a month the tax is unpaid, compounded annually. At the end of each calendar year, any tax, penalties and interest still due become part of the balance on which interest is charged.
Other penalties for fraud or serial offenses include higher penalties and even criminal charges.
“Zero returns”:
New Jersey requires that any seller with a sales tax permit file a sales tax return on your due date even if you don’t have any sales tax to report or pay.
And that’s it. You’ve mastered New Jersey sales tax filing! Now that sales tax is out of the way, you can get back to what you do best – running your business.
New Jersey Sales Tax Resources
For more about New Jersey sales tax, check out the New Jersey section of the TaxJar blog.