If you sell taxable goods or services in New Jersey, you need a Certificate of Authority for sales tax before your first sale, and you get one by completing the free NJ-REG Business Registration Application through the state’s online portal. The certificate authorizes you to collect the state’s 6.625% sales tax from customers and remit it to the Division of Taxation. There is no application fee, approval triggers quarterly filing obligations whether or not you make any sales, and the certificate itself has to be posted wherever you do business.
Who Needs a Certificate of Authority
New Jersey law requires every seller of taxable tangible personal property, specified digital products, or taxable services to register and obtain a Certificate of Authority before making any sales in the state. The definition of “seller” is broad and covers sales, leases, and rentals made from a physical location in New Jersey or remotely.1Justia. New Jersey Code 54-32B-2 – Definitions An office, warehouse, employee, or sales representative in the state is enough physical presence to trigger the requirement.
Remote sellers with no physical footprint still have to register if, during the current or prior calendar year, they cross either of two economic nexus thresholds: more than $100,000 in gross revenue from sales delivered into New Jersey, or 200 or more separate transactions delivered into the state.2New Jersey Division of Taxation. New Jersey Sales Tax Remote Sellers Frequently Asked Questions Either threshold alone is enough.
If You Only Sell Through a Marketplace
Sales made through a marketplace facilitator such as Amazon, eBay, or Etsy are collected and remitted by the marketplace itself, regardless of whether you individually would meet the nexus thresholds.3Justia. New Jersey Code 54-32B-3.6 – Marketplace Responsibility If marketplace sales are your only channel, you may not need your own Certificate of Authority. If you also sell through your own website or at physical locations, those non-marketplace sales still require you to register.
Urban Enterprise Zone Businesses
Qualified businesses in a New Jersey Urban Enterprise Zone collect sales tax at a reduced rate of 3.3125% instead of 6.625%. UEZ status is a separate application through the UEZ Business Certification System and must be renewed every three years, but you still need a standard Certificate of Authority before you can apply for UEZ certification.4New Jersey Division of Taxation. NJ Division of Taxation – Urban Enterprise Zone
How to Register
Registration runs through the NJ-REG Business Registration Application on the state’s online portal. Before you start, pull together:
- Your 10-digit Entity ID, issued when you formed your business entity. General partnerships and sole proprietorships do not have one.
- Your 8-digit NAICS code classifying your industry.
- Your Federal Employer Identification Number from the IRS.
- Information about how you will track and remit collected sales tax.
- Your mailing address and all business locations.
- Your anticipated first payroll withholding date, if you plan to hire employees.5Business.NJ.gov. Register Your Business
There is no fee to register for sales tax collection. The $125 charge that appears on the state’s fee schedule is the business-formation fee for creating an LLC or registering a foreign corporation; it is not a Certificate of Authority fee.6New Jersey Department of the Treasury. New Jersey Division of Revenue and Enterprise Services – Fee Schedule If you form a new entity and register for sales tax at the same time, you pay the formation fee but nothing extra for the certificate.
After you submit the application, the portal gives you a confirmation number you can use to track the request. Once the Division approves it, the official Certificate of Authority is mailed to the business address on file.
After You’re Approved
Display the Certificate
You have to display the certificate at all times, both at your place of business and at any event where you sell goods or services, including events where the sales themselves are completed online or through other off-site methods.7New Jersey Division of Taxation. NJ Division of Taxation – Information For Vendors Inspectors can ask to see it.
File Every Quarter
Once you’re registered, you owe a sales and use tax return every quarter. That return is due even in quarters when you made no sales and collected no tax. Zero returns still have to be filed.
If your sales and use tax collections exceeded $30,000 in the prior calendar year and you collect more than $500 in either the first or second month of a quarter, you also have to make a monthly payment for that month on top of the quarterly return. If prior-year collections were $30,000 or less, you stay on the quarterly schedule no matter what any individual month looks like.8New Jersey Division of Taxation. NJ Division of Taxation – Filing and Remitting Sales and Use Tax
Handle Resale Certificates Correctly
When a buyer tells you a purchase is for resale, they should give you a completed Form ST-3, the New Jersey Resale Certificate. A properly completed ST-3 shifts the tax liability off you: if the buyer later turns out to have claimed the exemption improperly, the buyer is responsible for the unpaid tax, not you.9New Jersey Division of Taxation. Form ST-3 – Sales Tax Resale Certificate
For that protection to hold, the ST-3 has to be fully completed with the purchaser’s name, address, New Jersey taxpayer identification number, type of business, reason for exemption, and signature. You need to receive it within 90 days of the sale. If the Division later audits you and you don’t have a valid certificate on file, you get 120 days after the Division’s request to either produce a certificate taken in good faith or show other evidence that the sale was not taxable.
What It Costs If You Don’t Register or File on Time
Operating without a Certificate of Authority is a separate violation that can lead to civil penalties or criminal charges. Filing late once you are registered gets expensive quickly.
A late return triggers two penalties at the same time: $100 flat for each month or partial month the return is late, plus 5% per month of the unpaid tax, capped at 25% of the amount due. If you still haven’t filed within 30 days of the Division’s first delinquency notice, the 5% monthly penalty gets recalculated against your total tax liability rather than just the underpayment.10Justia. New Jersey Code 54-49-4 – Late Filing Penalties
A separate 5% penalty applies to any tax paid late, even when the return was filed on time. Interest accrues monthly on the unpaid balance from the original due date, calculated at 3% above the average prime rate charged by commercial banks to large businesses as of the prior December 1. At year’s end, outstanding tax, penalties, and interest are rolled together, and interest begins compounding on the whole amount.11New Jersey Tax Debt Portal. New Jersey Tax Debt – Payment Help
How Long to Keep Your Records
New Jersey applies a four-year statute of limitations for both audits and refund claims.12New Jersey Division of Taxation. New Jersey Taxpayers’ Bill of Rights The Division can audit you for up to four years after a return’s original due date, so sales receipts, invoices, exemption documents, resale certificates, and filed returns should all be kept at least that long. Resale certificates specifically must be retained for four years from the date of the last sale covered by that certificate.9New Jersey Division of Taxation. Form ST-3 – Sales Tax Resale Certificate Digital copies work as long as the underlying data is preserved and the records can be produced for inspection.