Sales and Use Tax — Use Tax
In New Jersey use tax is a tax on the use of items or services that occurs when sales tax has not been paid on taxable items or services, or paid at a rate less than the New Jersey rate of 7%. Use tax is due when these items are purchased outside of New Jersey and brought into New Jersey.
For example, you purchase office equipment and supplies from an out-of-State vendor for use at your New Jersey place of business. The out-of-State vendor is not registered with New Jersey and did not charge you sales tax. The vendor’s home state has no sales tax. Since no sales tax was paid on the merchandise, you owe 7% of the purchase price in use tax.
If the other state had a 3% sales tax and that state also has sales and use tax reciprocity with New Jersey, then the New Jersey use tax liability is 4% of the purchase price of the property. The 4% use tax is the difference between the 7% that you would have owed if you had purchased the property from a New Jersey vendor, and the sales tax you actually paid to the out-of-State vendor.
If your business files New Jersey sales and use tax returns with the State of New Jersey, you may report and pay use tax on your sales tax returns. Individual taxpayers pay use tax by filing a New Jersey Use Tax Remittance, Form ST-18.
More information is available in our publication, ANJ-7, Use Tax in New Jersey. If your business is not registered to collect sales tax and would like information on paying use tax, refer to New Jersey’s Annual Use Tax Return.
For example, you purchase office equipment and supplies from an out-of-State vendor for use at your New Jersey place of business. The out-of-State vendor is not registered with New Jersey and did not charge you sales tax. The vendor’s home state has no sales tax. Since no sales tax was paid on the merchandise, you owe 7% of the purchase price in use tax.
If the other state had a 3% sales tax and that state also has sales and use tax reciprocity with New Jersey, then the New Jersey use tax liability is 4% of the purchase price of the property. The 4% use tax is the difference between the 7% that you would have owed if you had purchased the property from a New Jersey vendor, and the sales tax you actually paid to the out-of-State vendor.
If your business files New Jersey sales and use tax returns with the State of New Jersey, you may report and pay use tax on your sales tax returns. Individual taxpayers pay use tax by filing a New Jersey Use Tax Remittance, Form ST-18.
More information is available in our publication, ANJ-7, Use Tax in New Jersey. If your business is not registered to collect sales tax and would like information on paying use tax, refer to New Jersey’s Annual Use Tax Return.
