Applying-for-a-Sales-Tax-Permit-in-New-Jersey
Starting a business is an exciting journey, but it comes with great responsibilities. If you’re planning to sell products or services in New Jersey, then one of the most significant requirements is to apply for a sales tax permit. This permit, commonly referred to as a Certificate of Authority in New Jersey, allows you to collect sales tax from your customers lawfully.
Let’s go step-by-step in how to apply for a sales tax permit in New Jersey, what you need to know, and why it matters.
What is a Sales Tax Permit?
A sales tax permit is the official document that gives permission for a business to collect sales tax on taxable sales. In New Jersey, any vendor has to obtain this permit irrespective of whether you are doing online sales or have a brick-and-mortar business. Collecting sales tax is an important part of running a business because, from time to time, you will have to remit this tax to the state.
Why Do You Need a Sales Tax Permit?
You might be wondering why you need this permit. Here are a few reasons:
Legal Requirement: New Jersey law requires all businesses to register for a sales tax permit if they sell taxable goods or services.
Avoid Penalties: Without a permit, you could face fines and penalties from the state.
Collecting Sales Tax: You are legally allowed to collect sales tax from your customers, so your business runs smoothly and in compliance with the state.
Who Needs a Sales Tax Permit?
Generally, anyone selling taxable goods or services in New Jersey needs a sales tax permit. That means:
Retail Stores: A physical shop selling clothes, electronics, food, or other merchandise.
Online Shops: E-commerce businesses that sell products to customers in New Jersey.
Service Providers: Certain services also require sales tax, so it’s best to check if what you provide falls under this category.
Steps to Apply for a Sales Tax Permit in New Jersey
Applying for a sales tax permit is straightforward. Here’s a step-by-step guide to help you through the process:
Step 1: Gather Necessary Information
Assemblage of data
Before proceeding to apply for the sales tax permit, ensure that you get some information that you will present in the process. Collect the following data:
Business Information: Name of business, business address, type of business entity (as LLC, corporation, among others).
Personal Information: Your name, Social Security number, contact information
Business Type: Brief information on products or services
Procedure/Step 2: Type of Application Method
Sales tax permits can be done in New Jersey through the following application method:
Apply online using the New Jersey Online Business Registration Service. It’s easier and faster.
Fill a paper application and mail it to the state. The advantage is that it’s done and over with in that period of time.
Step 3: Apply
If you wish to apply online, do this:
- Go to the website for New Jersey Online Business Registration.
- Create an account or log in if you already have one.
- Fill out the online application form with all the required details.
- Submit the application.
For a paper application:
- Download the application form from the New Jersey Department of Treasury website.
- Fill in all the necessary details accurately.
- Mail the completed form to the address provided.
Step 4: Wait for Processing
After you have submitted your application, the state will process it. New Jersey usually takes 24 to 48 hours for processing. Nevertheless, this can take longer or shorter time. So, it’s better to check back in case you do not get updates.
Step 5: Receive Your Certificate of Authority
Once approved, you will receive your Certificate of Authority. You will have to post this at your place of business. Congratulations! You can now lawfully collect sales tax!
Maintaining Your Sales Tax Permit
You do not need to renew your sales tax permit periodically. However, any change in the business or location and closing of any business has to be conveyed to the New Jersey Division of Taxation. So, this keeps your accounts updated and helps avoid subsequent problems.
Sales Tax Collections
Now that you have your permit, it is time to collect sales tax. The tax rate in New Jersey for sales tax is currently set at 6.625%. Do not forget you are going to have to add this tax to whatever you sell to your customer. Here is how:
Total: Add 6.625% to what you are selling.
Collect from Customers: Instruct your customers to pay the entire amount with tax included.
Accurate Record Keeping: Accurately keep all collected sales tax records. These will be necessary for completing your tax return.
Preparation of Sales Tax Return
As a registered dealer, you are required to submit sales tax returns when your sales tax was collected either quarterly or annually. Be sure to:
File Returns on Time: Late deadlines can result in penalties.
Pay Collected Taxes: Make your sales tax payment directly to the state with your return.
Frequently Asked Questions
- How many days does it take before getting a sales tax permit in New Jersey?
That would take about 24 to 48 hours after one has submitted his application
- Is there any fee for the application of the sales tax permit?
No, you do not have to pay a registration fee for obtaining a sales tax permit in New Jersey.
- What happens if I don’t apply for a sales tax permit?
If you don’t apply for a sales tax permit, you could face fines and legal penalties. You also won’t be able to collect sales tax from your customers legally.
Applying for a sales tax permit is an essential step in running your business in New Jersey. By taking these steps, you are sure to fulfill all the requirements legally and focus on doing what you do best-grow your business!
If you have any questions or need assistance with your sales tax permit application, feel free to contact us and we’ll guide you through the process.
Begin your application process by visiting the New Jersey Division of Taxation’s official website for the latest forms and instructions.