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Should You Collect New Jersey Sales Tax?


 Ecommerce: the end of shopping as we know it.

Out-of-state sellers who make taxable sales of tangible personal property, specified digital products, and taxable services in New Jersey are considered to be soliciting business in New Jersey if they:

  • Enter into an agreement with a New Jersey independent contractor or other representative for compensation in exchange for referring customers via a link on their website, or otherwise, to that out-of-state seller; and
  • Have sales to customers in New Jersey from those referrals in excess of $10,000 for the prior four quarterly periods ending on the last day of March, June, September and December.

Beginning July 1, 2014, any out-of-state sellers meeting both of the above conditions must register for sales tax purposes in the state of New Jersey. They must collect and remit New Jersey sales tax on all sales delivered to New Jersey. Additional information.

New Jersey law creates a rebuttable presumption, enabling out-of-state sellers to provide proof that the independent contractor or representative did not engage in any solicitation on their behalf in New Jersey. Those able to prove so are not required to register with the state. It should be noted that the “burden is on the seller to prove that they are not required to collect and remit sales tax.”

Do you sell to customers in New Jersey? Are you liable for New Jersey sales tax? Are you sure?

Automated sales tax software simplifies sales tax compliance. Learn more.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.