New Jersey Modifies Sales Tax Exemption For Recycled Materials
The State of New Jersey released a statement that will require the Division of Taxation to give an annual review on the viability of sales tax exemption for qualifying recycled materials for manufacturing companies. Once the annual review, if completed, the results will be reviewed by the Legislature for whether the exemption should continue. Until legislation is enacted terminating the exemption, manufacturing facilities should continue to their exemption process of recycled materials.
Tax Bill Passed By Assembly And Senate
New Jersey just updated their guidance on their website that the tax bill was passed by the Assembly and Senate this afternoon and the Governor intends to sign tomorrow.
Gross Income Tax, Partnership, and Corporation Business Tax will be extended until July 15, 2020, to file returns and make applicable tax payments. Penalties and interest for these returns and payments will not be imposed until after July 15. Please note this includes 1st quarter 2020 estimated tax payments. All other returns and payments are due on their original due date.
Please see the due date chartsposted on the NJ Division of Taxation website.
Does New Jersey Have Click
Yes! This means if youre an affiliate sales or third party marketer, you may have a tax liability even if you dont meet nexus another way. If revenue exceeds $10,000/quarter four quarters in a row, affiliate marketers will need to register for and pay sales tax. For more information, NJ DOT issues this PDF about click-through nexus.
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What Is Eligible For Sales Tax In New Jersey
Sales tax applies to most tangible goods in New Jersey and few services, though there are exceptions to both of these provisions depending on the industry and situation. Here is a brief summary of what is taxable in the state:
It is recommended that you review the State of New Jerseys guide to sales tax and exemptions to see what applies to your particular business situation.
Contest A New Jersey Jeopardy Assessment
New Jersey may issue a Notice of Jeopardy Determination in certain situations. Thejeopardy assessment gives New Jersey Division of Taxation accelerated rights and it may immediately begin to try and collect.
To contest a jeopardy assessment, first, you must immediately pay the warrant amount. Then you have 90 days from the date of the action to appeal the Jeopardy Assessment. For more information, read yourappeal rights.
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New Jersey Issues Guidance On The Application Of Tax Credits On Combined Returns
New Jersey has indicated that with respect to combined returns, tax credits belong to the taxable member that earned them, unless a specific statute authorizes the tax credit to be earned or awarded at the group level. Any credit carryover available for future use belongs to the taxable member that originally earned the credit. If a member leaves the group, that member takes with them any tax credit/carryforward they generated. Any carryforward must be reduced by the amount that is used by the group and/or member. For specific details, please consult New Jersey Division of Taxation Technical Bulletin TB-90 .
Determining Sales Tax Nexus In New Jersey
In-state businesses are subject to collecting the 6.625% sales tax rate . Out-of-state businesses should determine if they have sales tax nexus in New Jersey first, however. Nexus can be identified if any of the following situations is true of your business:
- Any physical or tangible goods are stored in a warehouse in the state
- If you have any independent contractors, representatives or employees in the state
- If you have an office or other place of business located in the state
- If you deliver merchandise to individuals in New Jersey
- If you provide a maintenance program to anyone located in New Jersey
New Jersey has a Nexusquestionnaire you can complete on their website that will help you determine if any of the above applies to you and if you need to acquire a permit. For those businesses that believe they do not have nexus, the state requires you to complete Form NJ-REG.
There are two fulfillment centers in New Jersey for Amazon FBA. If you participate in the Amazon FBA program and your inventory is stored in these warehouses, you may be considered to have nexus in New Jersey.
New Jersey has an economic nexus law similar to most other states requiring out-of-state sellers to register to collect and remit sales tax if they reach a threshold of $100,000 in sales or 200 or more separate transactions in the current or previous calendar year into New Jersey.
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No Sales Tax Due For A Filing Period
You must file a sales tax return every filing period, even if no sales are made and no tax has been collected.
Failure to file will result in the Department filing a return on your behalf and estimating the amount to be billed. These estimated returns will be due and payable until an actual return is filed. If you no longer need your sales tax account , notify the Colorado Department of Revenue as soon as possible.
For more information, visit the How to Zero File a Sales Tax Return web page.
New Jersey Defends Unapportionted Partnership Fee At The Supreme Court
On February 28, 2022, the New Jersey Division of Taxation filed its response to Ferrellgas Partners LPs petition for a writ of certiorari challenging New Jerseys imposition of an unapportioned per-partner filing fee imposed on partnerships filing tax returns in the state. New Jersey imposes a $150 per partner filing fee, capped at $250,000, for every partnership filing a return in New Jersey. This filing fee is not subject to apportionment, so theoretically a partnership required to file a New Jersey return could be subject to a $250,000 fee even if there is no income derived from New Jersey sources. Plaintiffs argue that such a fee is actually a tax and as such the Constitution requires it to be subject to apportionment. New Jersey argues that the fee is intended to recoup the costs of administering the tax code, and is thus not a tax, and if not a tax, apportionment is not required. A decision on whether the Supreme Court will grant cert. will occur by the end of the current term expires in June or July.
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How To Register For A New Jersey Sellers Permit
You can register for a New Jersey Sales Tax Certificate of Authority online through the New Jersey Division of Revenue and Enterprise Services. To apply, youll need to provide certain information about your business, including but not limited to:
- Business name, address, and contact information
- Federal EIN number
Appeals Transcripts And Recordings
Appeals of Tax Court decisions must be filed with the Appellate Division within 45 days of the date of the Tax Court decision. You will be required to pay for and submit a transcript as part of your appeal. Transcripts are the written record of exactly what was said during court. Request a transcript.
You can also purchase an audio recording of your case for $10. The sound recording cannot be used for an appeal. To purchase a recording, complete the Tax Court sound recording request form. Then, mail the completed form and a check or money order payable to Treasure, State of NJ, to:
Tax Court – Administrative Office of the Courts
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New Jersey Ends Public Health Emergency Be Mindful Of Nexus And Telecommuting Issues
Earlier this month Governor Phil Murphy has issued an executive orderto end the public health emergency in New Jersey. While certain executive orders will remain in place until January 1, 2022, it is important to note that many other temporarily suspended rules will not continue to be suspended. The New Jersey Division of Taxation had posted on its website guidancepertaining to teleworking during the COVID-19 pandemic. With New Jersey officially ending the public health emergency, traditional State nexus rules for corporate income tax, personal income tax, sales tax, employee income tax withholding will again be operative. If you are an out-of-state business and have employees working for you or rendering services in New Jersey, you may have nexus in the State thereby triggering filing and reporting obligations. Please reach out to Withums state and local tax group with any questions you may have.
New Jersey Sales Tax Filing Frequency
New Jersey has taxpayers file on a monthly or quarterly basis depending on their annual tax liabilities:
Monthly: For annual tax collections above $30,000 AND collected more than $500 in the first and/or second month of the current calendar quarter
Quarterly: File quarterly if you do not meet the monthly filing conditions
Discounts: As of this posting, New Jersey does not offer any early filing discounts for sales tax
Late Fees: If you file your sales tax return late in New Jersey, the penalty is 5% of the tax due for each month or part of a month the return is late. The maximum penalty for late filing is 25% of the late taxes .
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Registering For Tax Purposes/ Business Registration Certificate
If you are doing business in New Jersey, you must register for tax purposes by completing the NJ-REG form with the New Jersey Division of Revenue and Enterprise Services . Failure to register for taxes will delay your ability to pay taxes owed to the state and can result in penalties and fees in addition to the amount of taxes owed.
When you complete the NJ-REG form, you will be prompted to identify the taxes your business will be required to collect and/or pay.
Although there are several types of taxes, the most common types are based on:
- Income tax: These are taxes collected on your businessâs net income and profits
- Sales and Use Tax: These are taxes paid for the sale of taxable goods and services
- Payroll Taxes and Wage Withholding: These are taxes held on your payroll
To complete the NJ-REG form, you will need:
- Your business Entity ID
- Your business EIN number
- Your NAICS code
- Your NJ business code
After registering, the State of New Jersey will use your address on file to mail you additional information required for ongoing compliance with New Jersey state taxes.
New Jersey Undertaking Corporation Business Tax Combined Reporting Initiative
The New Jersey Division of Taxation is in the process of identifying companies that have been included as part of a combined group filing and indicated that they havenexuswith New Jersey, but have not filed as a separate entity for periods prior to 2019. Beginning June 15, 2021, and running through October 15, 2021, companies that have had nexus with New Jersey prior to filing as part of combined return will have the opportunity to come forward and voluntarily comply with their Corporation Business Tax filing requirements. These companies are not eligible for a standard Voluntary Disclosure Agreement however, the Division will consider entering into aClosing Agreementwith approved companies based upon the following:
Failure to take advantage of this initiative will result in the look-back period going beyond return periods ending after June 30, 2016, as well as all applicable penalties and interest being assessed. For more information, please visit the New Jersey Division of Taxation websiteand/or email questions and requests for disclosure to the Nexus Audit Group atusing Combined Reporting Initiative as the subject line.
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When You Need To Collect New Jersey Sales Tax
In New Jersey, sales tax is levied on the sale of tangible goods and some services. The tax is collected by the seller and remitted to state tax authorities. The seller acts as a de facto tax collector.
To help you determine whether you need to collect sales tax in New Jersey, start by answering these three questions:
If the answer to all three questions is yes, then youre required to register with the state tax authority, collect the correct amount of sales tax per sale, file returns, and remit to the state.
Protest Rights And Audit Finding Confirmation
Any contested issues that were unresolved prior to the audit report being issued can beprotested/appealed by the auditee. This is done after the New Jersey Division of Taxation issues the Notice of Deficiency/Audit Assessment.
You have the right to protest an Audit Assessment if you disagree with it.
First, inform the auditor assigned to your case that you disagree with the assessment:
- Clearly state the reason why you disagree and
- Provide all necessary documentation supporting your position.
If you are still not satisfied after contacting your auditor, you have the right to appeal. If you disagree with adetermination made by the Division, you may:
- You must send your request within90 days of the determination date
- You may represent yourself at the conference or choose another individual to represent you
- For tax periods starting on or after January 1, 1999 and
- If you paid the entire assessment within one year after the time to protest or appeal has expired and
- If you file within 450 days after the time to protest or appeal has expired.
If you have received a Final Determinationand haven’t talked to someone who has experience with New Jersey state and local tax, now is the time. Do it before these deadlines are missed.
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New Jersey Announces Additional Extension For Passthrough Business Alternative Income Tax Returns
The New Jersey Division of Taxation has announced that they are allowing the following forms and payments associated with them to be filed by 11:59 p.m., May 17, 2021, without penalty or interest: PTE Election PTE-100 PTE-200-T and PTE Revocation of Election. The PTE-200-T is a 6-month extension from March 15 therefore, the extended due date remains September 15. The Division had previously announced that the due date for the abovementioned forms was April 15, 2021.
New Jersey Explains Conformity To Federal Interest Expense Limitations
On May 11, 2021, the New Jersey Division of Taxation released Technical Bulletin 87-R, which provides updated guidance to New Jerseys conformity to the federal interest expense limitations ofIRC 163for purposes of the corporation business tax . New Jersey conforms to the modifications ofIRC 163made as part of the CARES Act to the extent they are consistent with the CBT. Specifically, New Jersey conforms to the adjusted taxable income deduction limit for the applicable periods. For purposes of NJ CBT, the starting point for taxable income is entire net income before net operating losses and special deductions with several modifications for additions and deductions. Thus, a taxpayers entire net income as reported on a federal consolidated return must match the taxpayers entire net income on line 28 on Schedule A of the CBT-100 or BFC-1, before the respective New Jersey modifications, even though the taxpayers New Jersey return was filed on a separate entity basis. For specific information and details on combined/separate reporting, please see TB 87-R.
May 5, 2021
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Tax Court Filing Fees
File a motion in non-small claims matter, local or state tax
Each additional Parcel or State Tax type
Each additional Parcel or State Tax type
Non-small claims Counterclaim Each additional Parcel or State Tax type
Small claims Counterclaim Each additional Parcel or State Tax type
Note: Municipalities do not pay a filing fee for a counterclaim.
What Creates A Tax Nexus With The State Of New Jersey
Having nexus, also known as “sufficient business presence, with New Jersey means your business has established a taxing connection with a state. When this happens, you are required to collect and remit sales tax in New Jersey because you created a sales tax Nexus.
Even if your business maintains its main headquarters in another state, you may still have to charge and pay sales tax to the New Jersey Department of Taxation even if you never step foot in New Jersey.
So, how do you create a sales tax Nexus in New Jersey?
A business establishes a nexus in New Jersey by:
- having a business location in New Jersey
- having property stored in New Jersey
- employing any person in New Jersey
- contracting with a salesperson or other agent in New Jersey
- leasing equipment used in New Jersey
- performing services in New Jersey
- licensing the use of intangible property in New Jersey, or transporting property in New Jersey using the taxpayers vehicles.
Lets talk a bit more specifically about where your goods are stored, such as in the instance of an Amazon warehouse.
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How To Register For Sales Tax In New Jersey
Remote sellers can register for sales tax in New Jersey online, and then create an account with their Premiere Business Service, an online tax portal. This portal is also where youâll file and pay your tax returns. More on that later!The first step is to register for a sales tax permit. This is a really simple process! But before you begin, have this information handy:
- Your Social Security number
- Your Employer Identification Number
- NJ business code, which you can find in this document.
- North American Industry Classification System number. Each number is a 2-6 digit code. Find yours in the NAICS directory.
Register for a sellerâs permit
1. Go to the Online Business Registration site and click âGet Starter.â 2. The next page asks about what kind of business youâre registering. If you donât have any physical presence nexus in NJ, you need to select âRegister as Remote Seller only.â
If you do have physical presence in NJ, even just storing inventory in a warehouse there, then you are not considered a remote seller and need to complete the Online Business Formation process.3. Then youâll answer a few standard questions about your business, such as the day youâll begin taxable sales in NJ and whether you plan to sell year-round.
4. Next thereâs a series of questions about your contact information and address.
5. Finally, youâll complete registration by agreeing to the terms and âsigningâ your name as the Authorized Representative.