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by TaxJar January 12, 2025
When buying products to resell in the state of New Jersey , you can avoid paying sales tax on that purchase by presenting your New Jersey resale certificate.
Keep in mind that you should only use a resale certificate when you legitimately plan to resell, rent, or lease items or use them as parts or ingredients in products for resale. It’s not legal to use a resale certificate for items you plan to use yourself. (That’s even if those items are office supplies or other things you plan to use in the course of your business.)
Here’s what you need to know as a seller when using a New Jersey resale certificate, or if one of your customers presents a New Jersey resale certificate to you.
New Jersey has two separate resale certificates, here are the links to both:
You’re allowed to use these certificates to buy inventory, raw materials, and services tax-free as long as the form is filled out completely and correctly and you genuinely intend to to sell, lease, or rent the items you are purchasing tax-free. Make sure you don’t skip this step! You can be held legally liable if you buy items tax free but don’t sell them. If you find yourself later unable to sell the items, you can remit New Jersey use taxes on the goods or services once they’re determined unsaleable to get off the hook.
In general, New Jersey’s ST-3 resale certification requires the purchaser to provide their New Jersey tax identification number, but you can also provide a Federal Identification Number or an Out-of-State registration number when using the ST-3NR resale certificate.
Also keep in mind that if you have a New Jersey sales tax permit , you are required to collect sales tax from your New Jersey buyers .
You’re responsible for a few things when accepting a New Jersey resale certificate from a buyer. Failing to do any of these things and having a subsequent audit means that you’ll be the party on the hook for any fines and penalties. That said, the compliance steps are pretty easy.
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