SALES TAX 101 for NEW JERSEY

By December 3, 2018 New Jersey

The 10 Basics Every New Jersey Business Should Know About SALES TAX

What is Sales Tax in New Jersey?

When you buy items or services in New Jersey, you generally pay Sales Tax on each purchase. The seller (a store, service provider, restaurant, etc.) collects tax at the time of the sale and sends it to the State. The law exempts some sales and services from Sales Tax.

Are All Goods and Services Taxable?

No

How Do I Know What’s Taxable and What’s Not?

This link can help you determine what is taxable and what isn’t in New Jersey.

Who Pays Sales Tax?

Consumers pay sales tax.  Merchants do not pay sales tax out of their own pockets.  It’s commonly referred to as a  pass through tax.

What Am I Responsible For?

You are required to collect sales tax, hold it secure and send it to the State on-time and in-full.

When Is My Sales Tax Payment Due in New Jersey?

In New Jersey your tax filing frequency is determined by your revenue.  You may be an quarterly or monthly filer. Contact the state to determine your sales tax due date. Click here for New Jersey filing guidelines.

How Do I Know How Much Sales Tax to Charge? 

The rate of tax is 6.625% on taxable sales occurring on or after January 1, 2018. Click here to find your sales tax rateThe final and definitive answer is always the sales tax rate posted on State Department of Revenue website.  Rates posted on the web are often not up-to-date and incorrect.  It’s always the merchant’s responsibility to charge the correct sales tax rate.

Who Gets the Sales Tax Money?

In New Jersey  all sales tax gets paid directly to the State.

How Do I Manage Tax Exempt Sales?

Tax exempt organizations such as schools and religious organizations are often exempt from sales tax. They are required to give you copy of their “TAX EXEMPT CERTIFICATE” at the time of the sale and you are required to keep this certificate on file. Failing to do so may result in you paying the sales tax out of your own pocket if you have a sales tax audit.

What if I Forget to Pay or Spend the Money and Can’t Pay?

New Jersey has severe penalties for missing tax payments. You can find the penalties for late payments here. If you received a letter from the state for a late sales tax payment, you can call  609-826-4400  for assistance. If sales tax goes unpaid, states will seize the assets of the business or owner and auction them off to pay the debt. In extreme cases owners will be prosecuted and sent to jail. Even if the business closes, sales tax is a personal liability that will follow the owner until paid.

New Jersey Department Of Revenue Sales Tax

TAX RATE: New Jersey Sales Tax rate is 6.625%.

New Jersey Sales and Use TAX HELP: (609) 826-4400

This resource page is for informational purposes only.  If you have further questions regarding sales tax please contact DAVO support at 888-659-8432 or consult your tax adviser.

Automating sales tax is easy with DAVO. We can have you up and running in minutes so that you can concentrate on what's important to you, running your business.