How to Register for a Sales Tax Certificate in New Jersey
Most businesses starting in New Jersey that sell a product or offer certain services will need to register for a sales tax certificate. This is commonly referred to as a seller’s permit, sales tax permit, sales tax license, sales tax number, or sales tax registration.
The sales tax certificate is obtained through the New Jersey Division of Revenue and Enterprise Services as a part of applying for the New Jersey Business Registration (NJ-REG). This registration allows a business to not only register to collect sales tax, but also when hiring employees.
Who needs a sales tax certificate in New Jersey?
A business must register for a sales tax certificate in New Jersey when:
- A business has sales tax nexus. Nexus means having a physical presence in the state, such as having a physical location like a retail store or office or using a warehouse or fulfillment center to store inventory.
- Selling products and taxable services in New Jersey (includes occasionally selling items at craft shows, fairs, seminars, conventions, etc.)
- Employees (including sales representatives, agents, or independent contractors) are working in New Jersey
- An out-of-state business selling to New Jersey residents and one of the following:
- Total annual sales of tangible personal property to New Jersey residents is $100,000 or more; or
- Having 200 or more transactions sent to New Jersey residents annually.
What products and services are taxable in New Jersey?
Physical products
There are a few exceptions, but almost all physical products are taxable when sold at retail in New Jersey. Common examples include:
- General merchandise like furniture, appliances, and clothing
- Titled or registered items like vehicles
Most unprepared food, clothing, and medical supplies are exempt from taxes. See the full list of items exempt from sales taxes.
Labor, in most cases, isn’t taxable in New Jersey. For instance, let’s say you broke the screen of your cell phone and take it to a cell phone repair shop to have it fixed. Sales tax would be added to the selling price of the new screen and any additional parts to fix the phone. The labor to replace the screen isn’t taxable. However, a business that makes furniture will indirectly have a sales tax on labor. In this instance, let’s say this business is building a dining room table for a customer. Through labor, the pieces of wood are shaped, sanded, and painted to build this piece of furniture. While the labor isn’t directly taxable, sales tax is charged to the final selling price of the table.
Digital Products
Digital products are taxable in New Jersey.
Services
Most services aren’t taxable in New Jersey, however, there are a few exceptions, some of which include:
- Landscaping
- Labor on auto repair
- Admissions (sports, movie theater, places of amusement)
- Pet boarding and grooming
- Cleaning services
How to register for a sales tax certificate in New Jersey
A sales tax certificate can be obtained by registering online through the Division of Revenue and Enterprise Services or by mailing in the NJ-REG form.
Information needed to register includes:
- Federal Employer Identification Number (FEIN) from the IRS, or the owner’s Social Security Number if a sole proprietorship with no employees
- Legal business name
- Physical address and mailing address
- Beginning date of the business
- Type of business entity: Sole Proprietorship, Partnership, Corporation, Limited Liability Company (LLC)
- New Jersey Business Code (4-digit code that identifies the main business activity of the business)
- Business seasonality
- Names, SSN, and addresses of owners/officers/members
- North American Industry Classification System (NAICS) code
- Date sales are first expected to take place
Sales tax reporting
How is sales tax collected?
When a business makes a sale of a taxable product or service, the business charges the appropriate sales tax rate to the customer. This tax is collected by the business which is then sent to the New Jersey Division of Revenue and Enterprise Services.
How much is sales tax in New Jersey?
The state sales tax in New Jersey is 6.875%. While there are no local sales taxes, there are Urban Enterprise Zones that allow some goods to be exempted from sales taxes. The sales tax rate that is charged varies depending on the address of the business if the purchase is made in the store. When shipping in-state, the sales tax is based on the address of the purchaser.
In addition to the statewide tax, there are additional sales taxes that may be added by cities and municipalities. To find sales tax rates, see the sales tax map.
When are New Jersey sales tax returns due?
The Division of Revenue and Enterprise Services will determine a filing frequency based on the expected volume of sales, which will be monthly, quarterly, or annually. Generally, a business collecting over $500 each month will file monthly.
Filings are due on the 20th day of the month following the reporting period, unless the 20th falls on a weekend or federal holiday, in which case would move to the next business day.
Even if the business had no sales during the reporting period, a filing is still required indicating no sales occurred.
How much does a sales tax certificate cost in New Jersey?
There is no cost for a sales tax certificate in New Jersey.
How long does it take to get a New Jersey sales tax certificate?
Expect up to 24 hours to receive a New Jersey sales tax certificate when registering online or up to 2 weeks when applying by mail.
Do you have to renew your New Jersey sales tax certificate?
The sales tax certificate is a one-time registration and no renewals are needed. Be mindful that if any information about the business changes such as the mailing address, additional locations, or change in ownership, those changes need to be updated with the New Jersey Division of Revenue and Enterprise Services.
How do I get a wholesale license in New Jersey?
A business can purchase items to resell without paying the retail sales tax. The tax liability is passed from the wholesaler or distributor to the retailer, who will then charge state sales tax to the end-user of the item.
Wholesalers and distributors will require a sales tax number, and the reseller will fill out a New Jersey Resale Certificate (also referred to as a wholesale license, seller’s permit, or sales tax exemption certificate) to document the items being purchased are for resale.
If you have questions about the sales tax certificate, the New Jersey Division of Revenue and Enterprise Services has a Sales Tax Guide or can be contacted by calling 609-292-9292.
