Most businesses starting in New Jersey that sell a product or offer certain services need to register for a New Jersey sales tax certificate. This certificate can also be 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 when applying for the New Jersey Business Registration (NJ-REG). This registration allows a business to register not only to collect sales tax but also to hire employees.
Related: New Jersey Startup Checklist
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 a 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.)
- Hiring employees who work in New Jersey (including remote employees, sales representatives, agents, or independent contractors)
- An out-of-state business has either $100,000 or more in sales of tangible personal property or 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.
Digital Products
Digital products are taxable in New Jersey.
Services
In New Jersey, labor charges are generally not subject to sales tax. For example, if you run a computer repair business and a customer brings in a computer for repair, the labor you charge for fixing the computer is not taxable. The customer would only pay sales tax on any replacement parts or components used in the repair, not the labor itself.
Some services are taxable in New Jersey. These primarily 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 for the New Jersey Business Registration. This can be done online through the Division of Revenue and Enterprise Services or by mailing 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, general 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, SSNs, 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 sells a taxable product or service, it charges the customer the appropriate sales tax rate. The business collects this tax and sends it 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 purchaser’s address.
In addition to the statewide tax, cities and municipalities may impose additional sales taxes. The state sales tax map shows sales tax rates throughout the state.
When are New Jersey sales tax returns due?
The New Jersey Division of Revenue and Enterprise Services will determine a filing frequency based on the expected sales volume, 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, which 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.
New Jersey Sales Tax Certificate FAQs
How much does a New Jersey sales tax certificate cost?
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?
When registering online, expect to receive a New Jersey sales tax certificate within 24 hours 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, needs to be updated by 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 that the items being purchased are for resale.
Is a business license the same thing as a sales tax certificate?
No – A business license and a sales tax certificate serve distinct purposes.
A business license authorizes the operation of a business within a particular jurisdiction, ensuring compliance with local laws and regulations. On the other hand, a sales tax permit enables a business to legally collect sales tax from customers, which is then remitted to the state government.
Most businesses need both.
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.
