Sales Tax Fundamentals
Get up to speed on the basics of sales tax
Do you need to collect sales tax in New Jersey?
You’ll need to collect sales tax in New Jersey if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic. Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state. Economic nexus means passing a states’ economic threshold for total revenue or the number of transactions in that state.
Do you have physical nexus in New Jersey?
New Jersey considers a seller to have physical nexus 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 has to say about what constitutes sales tax nexus in New Jersey.
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 taxable?
Services in New Jersey are generally not taxable. However – 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.
Is SaaS taxable in New Jersey?
SaaS is non-taxable in New Jersey. (Source)
How to get a sales tax permit in New Jersey
You have two options to register your business for a sales tax permit in New Jersey: online and filling out forms and mailing them in.
For sellers who live in New Jersey, we recommend registering online. To register online, head to the New Jersey Business Registration Page page.
For sellers who live outside of New Jersey but have nexus there for another reason, we recommend registering by paper form. This is because New Jersey’s automated system assumes all registrants are in-state and will try to get you to also register with the Secretary of State (which you, as an out-of-state seller, don’t need to do.) This site will walk you through all the steps to enroll online. Or, you can find the printable form, here.
PO Box 252
Trenton, NJ 08646-0252
33 West State St 3rd Floor
Trenton, NJ 08608
You need this information to register for a sales tax permit in New Jersey:
- Federal Identification Number
- Trade Name
- Type of Ownership
- New Jersey Business Code
- Owner, partnership, corporate officers info
- Other basic info (if business is seasonal, entity, subsidiary, info about what you sell, etc.)
There is no fee required to file Form NJ-REG and register your business. Other business registration fees may apply.
Collecting Sales Tax
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 and use tax rate. (If you need to calculate sales and use tax rates in any other state, the TaxJar sales tax calculator can be found here.)
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 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.
Filing Sales Tax
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
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 for 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.