Recently enacted legislation ( P.L. 2003, c. 42) authorizes most New Jersey retail vendors to advertise that the vendor will pay the 6% New Jersey sales tax for the customer in particular transactions. This is a change from the prior law, which prohibited vendors from advertising in this way. Sellers of natural gas, electricity, and utility services are NOT authorized to advertise in such a manner.

In order to take advantage of the new law, the vendor must meet the following conditions:

1. The advertisement must indicate that the vendor is paying the tax for the customer and cannot imply that the sale is not subject to tax;
2. If the customer receives a sales receipt, invoice or other written statement of the transaction, it must indicate that the 6% New Jersey sales tax is being paid by the vendor;
3. The vendor must pay the tax as trustee for the State and is liable for the tax in the same manner as if it were collected from the customer.

The tax is to be reported and remitted as "sales tax," not as "use tax" because the vendor is assuming the obligation to pay the sales tax FOR the customer. All sales where the vendor pays the tax under these conditions must be included in the vendor's gross receipts and the tax must be remitted accordingly.