Unlike other states like New York, North Carolina, and South Dakota, New Jersey doesn’t impose any additional local sales taxes.
For instance, the total sales tax of Atlantic City in Atlantic County is 6.625%.
However, businesses in areas under the Urban Enterprise Zones (UEZs), like Trenton and Union City, can apply for partial sales tax exemption on a specific retail sale, with qualifying purchases being taxed at 3.3125%.
So what’s a UEZ?
A UEZ is a distressed area in New Jersey that falls under one or multiple municipalities. UEZs offer business and customer benefits to fuel local economic activity.
New Jersey also allows some cities and counties to charge special taxes on specific purchases.
For example, Millville, a city in Cumberland County, imposes a 2% special local tax in the Millville Sports and Entertainment District for food and drink, entry fees, hotel stays, etc. It’s used to fund projects in the sports and entertainment district.
How to Calculate Sales Tax in New Jersey
You can use these methods to calculate your sales tax:
Tax brackets that specify a tax rate for different sale amounts.
Multiply taxable receipts by the applicable New Jersey tax rate.
If you aren’t using tax brackets, ensure you calculate your sales tax to the third decimal point. You can then round up to the next cent if it’s $0.005 and above or round down if it’s less than $0.005.
Next, let’s find out how state sales tax is collected in New Jersey.
Collecting Sales Tax in New Jersey
Here are the answers to some common questions regarding tax collection in New Jersey:
Do I have to Collect New Jersey Sales Tax from Customers?
New Jerseyan retailers who meet these two requirements are required to collect sales tax in New Jersey:
New Jerseyan retailers who meet these requirements are required to collect state sales tax in New Jersey:
Physical Location: If you have a warehouse, office, or distribution center located in New Jersey, you’ll have to get a seller’s permit.
Employee Location: A company with employees or any other representation in New Jersey should pay taxes.
Affiliate Nexus: If you make taxable sales of more than $100,000 or 200 transactions in the previous or current year, you’ll have to pay sales tax.
Trade Shows: Sellers participating in seasonal or temporary trade shows must register for sales tax if they sell taxable goods and services.
Tangible Personal Property: Selling, leasing, or renting tangible personal property is subject to sales tax.
Do I Have to Collect Sales Tax from New Jersey Customers if I Sell on Amazon, Walmart, Ebay, or Etsy?
New Jersey has a marketplace facilitator law, meaning online marketplaces like Amazon, Walmart, etc., should collect sales tax on behalf of third-party marketplace sellers.
Like in many states, sales made via marketplaces still count toward your New Jersey economic nexus threshold.
If you’re over the economic nexus threshold in New Jersey and only sell to New Jersey buyers via marketplaces, then you need to register for a New Jersey sales tax permit. But you can request to be placed on a non-reporting basis so that you aren't required to file New Jersey sales tax returns.
Just like income tax, the state collects sales tax too.
When you register for your New Jersey sales tax permit, the state assigns you a filing frequency and sales tax due dates. In New Jersey, although most sales tax filers file and pay quarterly, some sales tax filers may need to file quarterly but pay monthly.
When your sales tax due date rolls around, your next step is to calculate how much sales tax you collected from buyers in the state and in each district.
From there, you can file and pay New Jersey sales tax through multiple ways:
Next, let’s find answers to a few FAQs regarding New Jersey sales taxes.
FAQs on Paying and Filing New Jersey Sales Tax
Here are some commonly asked questions and their answers:
1. What Is Use Tax?
Use tax is imposed on the use of taxable items and services in New Jersey when you don’t pay sales tax.
You may have to use tax if you:
Didn’t pay sales tax of any kind.
Paid sales tax to another jurisdiction at a rate lower than New Jersey’s.
Note: Use tax is applicable even if the out-of-state seller claims your purchase is tax-free or collects sales tax for another jurisdiction (if the amount paid to the out-of-state jurisdiction is less than the New Jersey tax rate).
2. Is New Jersey part of the Multistate Tax Commission or the Streamlined Sales Tax Project?
New Jersey is part of both the Multistate Tax Commission and the Streamlined Sales Tax Project.
The Multistate Tax Commission is an intergovernmental state tax agency that aims to facilitate uniform and consistent tax policy and administration among the states.
Meanwhile, the Streamlined Sales Tax Project aims to minimize costs and administrative burdens on retailers that collect sales tax, particularly retailers operating in multiple states.
3. I didn’t Collect any New Jersey Sales Tax During this Period. Do I still Need to File a Return?
If you file monthly but didn’t collect any sales tax over the month, there is no need to file a New Jersey sales tax return. Instead, simply file a quarterly sales tax return as normal.
If you file quarterly and still don’t collect any sales tax, simply file a “zero return” to let the state know you did not collect any sales tax.
4. What is the Penalty for Filing and/or Paying New Jersey Sales Tax Late?
The penalty for a late sales tax filing in New Jersey is 5% of the tax due each month you fail to pay the tax debt. The maximum penalty is 25% of the due tax debt.
New Jersey also reserves the right to charge a $100 fine for each month the return is late.
The state may also charge a late payment penalty in addition to the late filing penalty, which is 5% of the sales tax due.
Additional penalties may apply if your tax bill is sent to collections.
5. Can I Get an Extension on Filing My New Jersey Sales Tax Return?
Yes, you can request an extension to file your tax during unavoidable circumstances like a natural disaster, but not on time to pay.
However, you’ll have to submit sufficient evidence to support your claim.
6. Does New Jersey Offer Sales Tax Holidays?
The state also offers a sales tax holiday on selective dates, like back-to-school tax holidays from August 26 to September 4, 2023. During a sales tax holiday, specific retail items will be tax-exempt.
7. Can I Amend a New Jersey Sales Tax Return?
Yes. Mistakes made on a monthly sales tax return can be amended on the next or any quarterly sales tax return filed in that same calendar year. You can amend your return online or via phone.
If you overpaid sales tax, you can request a refund by amending your return and filing Form A-3730.
8. How often will I be Required to File and Pay Sales Tax in New Jersey?
You’ll have to pay sales tax monthly if you:
Collected more than $30,000 in New Jersey sales tax in the previous calendar year.
Collected more than $500 in sales tax in the taxable month.
All other sellers are required to file and pay New Jersey sales tax quarterly.
9. New Jersey Sales Tax Due Dates
New Jersey sales tax is due by 11:59 p.m. on the 20th day of the month following the taxable period.
If your sales tax filing due date falls on a weekend or holiday, it’s due the next business day.
Filing Due Date
February 21, 2023
March 20, 2023
April 20, 2023
May 22. 2023
June 20, 2023
July 20, 2023
August 21, 2023
September 20, 2023
October 20, 2023
November 20, 2023
December 20, 2023
January 22, 2024
Let’s take a look at the New Jersey quarterly sales tax filing due dates:
Filing Due Date
Q1 (January-March) 2023
April 20, 2023
Q2 (April-June) 2023
July 20, 2023
Q3 (July-September) 2023
October 20, 2023
Q4 (October-December) 2023
January 22, 2024
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