StartIndustry Starter Kits
ContentsForm Your BusinessDevelop an Alternate Name (DBA)Obtain anEmployer Identification Number from the IRSRegister for NJ Tax and Employer Purposes
ContentsRegister for Tax Purposes/Business Registration CertificateUnderstand How to File Income TaxCollect Sales and Use Tax from CustomersUnderstand Employer Tax and Reporting Requirements
There is more to New Jersey business taxes than just income tax. Part of your business will be to collect sales and use tax on goods and services, as well as payroll and employer taxes.
Recent Regulations and Resources
Register 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 (DORES). 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 business’s 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 (if you have employees)
To complete the NJ-REG form, you will need:
- Your business Entity ID (If you’re a corporation, LLC, LLP, or LP. An EIN is a 10-digit unique identifier used for your non-tax records)
- Your business EIN (this is a 9-digit unique identifier provided to you by the federal government for your business)
- Your NAICS code (this is an 8-digit number used to classify your business industry in the United States)
- Your NJ business code (this is a 4-digit number used to classify your business in the state of New Jersey)
Once you complete your registration, you will receive a registration confirmation with your New Jersey Tax ID number and a Business Registration Certificate (BRC). Your New Jersey Tax ID number will be the same as your EIN plus a 3-digit suffix and is used for state tax purposes. Your BRC will include a control number used only to verify that your certificate is current. You must display this document in your place of business. If you completed your application online, you will be issued a printable BRC immediately with a paper form being mailed to you in a few weeks.
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.
Understand How to File Income Tax
Income tax is assessed on the net profits (gross revenue minus expenses and costs) earned by your business in New Jersey for the year.
In general, your state income tax return is due on the same date as your federal tax return. That said, you may have to make payments more regularly than annually. The frequency at which you file or pay taxes will be unique to your business structure and industry. For more specific information on reporting and paying tax on your business income, see New Jersey Tax Guide: Starting a Business in New Jersey.
Collect Sales and Use Tax from Customers
Your business (e.g., a retailer, certain service providers, restaurants, etc.) should collect Sales Tax from customers when you sell a taxable good or service.
If your business sells taxable products or services, you must indicate that you will be collecting Sales Tax on your registration form NJ-REG. You will be required to collect Sales Tax on sales of taxable services performed in this State and/or taxable goods delivered to a New Jersey location. The Sales Tax Guide lists items that are taxable or exempt from Sales Tax. Review the guide to determine if the goods you sell and/or the services you provide are taxable.
Some examples of taxable items are:
- Automobiles, furniture, carpeting, and meals bought in restaurants.
Some examples of taxable services are:
- Lawn maintenance, auto repair, snow removal, and telecommunications
Use Tax is owed by New Jersey businesses that buy taxable products out of state, online, or via the mail, and then bring the products to New Jersey or have them shipped here for use in this State. Learn more about Use Tax.
If you identified that you will be collecting sales tax on your NJ-REG form, you will receive a Certificate of Authority to Collect Sales Tax from the State. This document must be displayed at your business location.
You must file a New Jersey Sales and Use Tax Quarterly Return with Form ST-50 every three months even if no tax was collected during that particular quarter (note: If you had no sales during the quarter, simply file the return with all zeros).
Some businesses will be required to make monthly payments for the first two months of the quarter (Form ST-51) if the business:
- Collected more than $30,000 in Sales and Use Tax in New Jersey during the prior calendar year; and
- Collected more than $500 in the first and/or second month of the current calendar quarter.
You can file the quarterly return and make payments online. Failure to file the return and pay the tax by the due date (on or before the 20th day of the month after the end of the filing period) may result in the assessment of interest and/or penalty.
Under New Jersey law, some items are exempt from sales and use tax regardless of who buys them or how they are used (e.g., most clothing, food, food ingredients, and prescription drugs). Purchases of these items don’t require an exemption certificate.
There are, however, items that are exempt from tax only under certain conditions. The New Jersey Division of Taxation issues exemption certificates that allow qualified individuals and businesses to purchase taxable merchandise and services without paying Sales Tax. Each certificate has a specific purpose. You should use the one that applies to your purchase. For more information on exemption certificates, see the publication S&U-6 Sales Tax Exemption Administration.
If your business will purchase items for resale or purchase items to incorporate into an item for resale you will need to complete and provide the Resale Certificate to your suppliers. Resale Certificates allow your business to purchase items for resale without paying Sales Tax. Sales Tax should only be collected when the items are sold at retail. Registered businesses can obtain the resale certificate online.
Some of the Resale Certificates you might use are:
- Form ST-3: Used for in-state suppliers
- Form ST-3NR: Used for out-of-state suppliers
- Form ST-4: Used for tax exemption on production machinery and packaging supplies
Understand Employer Tax and Reporting Requirements
When you hire an employee you need to register to pay employer and payroll taxes, among other forms and filings. Learn more about the requirements for new hires. The determination of employee versus independent contractor status is particularly difficult in certain situations, so it is important to know the law and regulations as the consequences of not knowing can be significant. Information on how to classify your employee, if you are unclear about their status, can be found on the NJ Division of Labor's website.