Prior Year Sales and Use Tax Publications


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Prior Year Sales and Use Tax Publications

  1. 1. T New Jersey Division of Taxation Sales Tax Exemption Certificates AX Sales Tax Exemption OPIC Certificates Bulletin S&U-6 Introduction NJ Exemption Certificates The New Jersey Sales and Use Tax Act (the Under New Jersey law, some items are exempt “Act”) imposes a tax of 6% on the receipts from from sales and use tax regardless of who buys every retail sale of tangible personal property them or how they are used. Examples of exempt and some services (except as otherwise provided items include most clothing, most items of food in the Act). Under certain conditions, exemp- and drink (except when sold in or by restaurants tions are provided for otherwise taxable trans- or similar establishments) and prescription drugs. actions. This bulletin explains the proper com- There are however, items which are exempt pletion and use of the following New Jersey from tax only under certain conditions. The New exemption certificates used to make qualified Jersey Division of Taxation issues several ex- exempt purchases: emption certificates which allow qualified indi- Form ST-3 Resale Certificate viduals and businesses to purchase taxable mer- chandise and services tax-free. Each exemption Form ST-3NR Resale Certificate for Non-New Jersey Vendors certificate has its own specific use. Form ST-4 Exempt Use Certificate Agencies of the Federal government and the Form ST-5 Exempt Organization United Nations as well as the State of New Jer- Certificate sey and its political subdivisions are exempt Form ST-6A Direct Payment Certificate from paying sales tax provided the agency mak- Form ST-7 Farmer’s Exemption Certificate ing the purchase supplies the vendor with a copy Form ST-8 Certificate of Capital of a valid purchase order or contract signed by Improvement an authorized official. See page 13 for further Form ST-10 Motor Vehicle Sales and Use information. Tax Exemption Report Form ST-10-A Aircraft Dealer Sales and Use Tax Exemption Report Registration Form ST-10V Vessel Dealer Sales and Use Any person or organization engaged in selling Tax Exemption Report taxable goods or services in this State must reg- Form ST-13 Contractor’s Exempt Purchase ister with the State for sales tax purposes by fil- Certificate ing a business registration application (Form Form ST-16 Exemption Certificate for NJ-REG) at least 15 business days before start- Student Textbooks ing operations or opening an additional place of Form UZ-4 Contractor’s Exempt Purchase business in this State. If your application indi- Certificate - Urban Enterprise cates that you will collect sales tax or purchase Zone items for resale, you will be sent a New Jersey Form UZ-5 Urban Enterprise Zone Exempt Certificate of Authority (Form CA-1) for sales Purchase Certificate tax. This certificate is your authorization from Rev. 1/95 Rev. 4/04 1
  2. 2. Bulletin S&U-6 the State of New Jersey to collect sales tax and tion specified on the form. Eligible nonregis- to issue or accept exemption certificates. tered purchasers issuing exemption certificates must provide one of the following in lieu of a The Certificate of Authority will bear your as- New Jersey tax identification number: signed New Jersey tax identification number, which is usually based on either your Federal 1. Federal employer identification number of employer identification number (FEIN) or your the business social security number. Your New Jersey tax 2. Out-of-State registration number identification number will appear on all pre- printed forms sent to you by the State. You must 3. I.C.C. permit number include your tax identification number on all 4. Social security number exemption certificates you issue. Nonregistered purchasers may issue the follow- A Public Records Filing may also be required ing exemption certificates: depending upon the type of business ownership. More information is available in the New Jersey ST-3NR Resale Certificate for Non-New Jersey Complete Business Registration Package Vendors (NJ REG) or by calling 609-292-6400. ST-4 Exempt Use Certificate Form NJ-REG may be filed online from the ST-7 Farmer’s Exemption Certificate Division of Revenue’s New Jersey Business ST-8 Certificate of Capital Improvement Gateway Services Web site ( njbgs/). The Public Records Filing required for ST-16 Exemption Certificate for Student certain businesses may also be completed online Textbooks from this Web site. (There is a fee associated with the Public Records Filing.) However, the New Jersey seller accepting an exemption certificate must always be registered with New Jersey. Issuing and Accepting Exemption Certificates A single exemption certificate may cover addi- Generally, both the purchaser issuing an exemp- tional purchases of the same general type of tion certificate and the seller accepting it must property by the same purchaser from the same be registered with New Jersey. However, non- vendor. registered purchasers may issue exemption Generally, out-of-State businesses wishing to certificates in certain circumstances. make exempt purchases in this State must register The purchaser must fill out the exemption with New Jersey. However, exceptions exist for certificate completely, providing the purchaser’s “drop shipments” and for “qualified out-of-State New Jersey tax identification number, the name vendors” making purchases in this State for and address of the vendor, the merchandise or resale. A drop shipment occurs when an out-of- service being purchased, and any other informa- State vendor that is not registered with New 2 Rev. 4/04
  3. 3. Sales Tax Exemption Certificates Jersey instructs a New Jersey vendor to deliver Federal employer identification number, out- merchandise to the out-of-State vendor’s cus- of-State registration number, I.C.C. permit tomer in New Jersey. The acceptable resale cer- number, or social security number; tificates for a qualified out-of-State vendor to • Property purchased is of a type ordinarily used use for a drop shipment are: for an exempt purpose in the purchaser’s busi- 1. Purchaser’s out-of-State resale certificate; or ness (in the case of a business); and 2. Multijurisdiction Uniform Sales & Use Tax • Seller has no reason to doubt that the pur- Certificate published by the Multi-State Tax chaser has the right under the Sales and Use Commission; or Tax Act to make an exempt purchase. 3. New Jersey Form ST-3NR. Example For information on purchases for resale by Joe, of J and J’s Pharmacy, may issue a New “qualified out-of-State vendors” see Resale Jersey Resale Certificate, Form ST-3, to buy Certificate for Non-New Jersey Vendors (Form cosmetics for resale. However, he may not use a ST-3NR) on page 7. resale certificate to purchase tires for his deliv- ery truck. The tire vendor can determine from Good Faith the information listed on the ST-3 that Joe is To act in good faith means to act in accordance clearly not in the business of selling tires and with standards of honesty. In general, registered therefore may not issue (and the vendor may not vendors who accept exemption certificates in accept) a resale certificate for this purchase. good faith are relieved of liability for the collec- tion and payment of sales tax on the transaction Improper Certificates covered by the exemption certificate. The busi- Unless all the good faith conditions are met, the ness owner is presumed to be familiar with the seller may not accept the exemption certificate, law and the regulations pertaining to the busi- and must collect sales tax from the purchaser ness, and to know when exemption certificates instead. Sales transactions which are not sup- can be issued or accepted. ported by properly executed exemption certifi- cates are considered taxable sales. The burden In order for good faith to be established, the of proof that tax was not required to be collected following conditions must be met; is on the seller. • Certificate must be an official form or a proper and substantive reproduction; Correcting Certificates Businesses have up to sixty (60) days after the • Certificate must be filled out completely and sale is completed to obtain a corrected certifi- correctly; cate if the original exemption certificate lacked • Certificate must be dated and include the pur- some necessary information, or if the informa- chaser’s New Jersey tax identification number tion was incorrectly stated. or, for a qualified nonregistered purchaser, the Rev. 4/04 3
  4. 4. Bulletin S&U-6 Retaining Certificates in its present form or for incorporation into Certificates must be retained by the vendor for other property held for sale. When purchasing at least four (4) years from the date of the last goods or services, a retailer or wholesaler issues transaction covered by the certificate. Certifi- Form ST-3 to the wholesaler or manufacturer. cates must be in the physical possession of the This exempts the retailer or wholesaler from the seller and available for inspection by the Divi- sales tax on the purchase. Sales tax is collected sion of Taxation. when these items are sold at retail. New Jersey registered businesses may issue Form ST-3 Out-of-State Sales when purchasing the following: A vendor that sells taxable items to customers in another state and delivers the items sold out of • Inventory intended for resale, rent or lease State to the purchaser does not collect New Jersey sales tax. The vendor’s records should Example show the out-of-State destination point and the Ron, of Ron’s Toy Store, purchases an inven- vendor should keep evidence of the method of tory of dolls to sell on a retail basis. Ron is- delivery to that location such as parcel post sues the doll manufacturer a resale certificate receipts, bills of lading, etc. For more informa- instead of paying sales tax. tion on out-of-State sales, request ANJ-10, Out- Ron also needs display cases for the dolls. He of-State Sales & New Jersey Sales Tax. may not use a resale certificate when purchas- ing the display cases because they are not Sales are subject to New Jersey sales tax if the intended for resale. He must pay sales tax on out-of-State customer takes delivery or posses- the display cases. sion of the items sold in this State at the time of purchase. However, if it is a purchase for resale, Example an out-of-State purchaser that is registered with Allen, of Appliance Rentals, Inc., purchases New Jersey may issue a New Jersey Resale inventory to rent on a retail basis. He issues Certificate (Form ST-3) and not pay sales tax. his supplier Form ST-3 and does not pay sales A qualified out-of-State vendor may also make tax on the purchases. Allen will collect sales tax-exempt purchases in New Jersey of goods tax from his customers each time they rent an and services purchased for resale. See Resale appliance from him. Certificate (Form ST-3) below and Resale Certificate for Non-New Jersey Vendors (Form When items purchased with a resale certificate ST-3NR) on page 7. are taken out of inventory for personal use, the business owner must pay New Jersey use tax on Using Exemption Certificates the items that are not resold. Use tax is com- puted on the purchase price of the items at the Resale Certificate (Form ST-3) current sales tax rate. For more information on Form ST-3 is used by registered vendors to pur- use tax liabilities, request ANJ-7, Use Tax in chase tangible personal property either for resale New Jersey. 4 Rev. 4/04
  5. 5. Sales Tax Exemption Certificates Inventory for resale does not include supplies When Midge purchases tools for her business, and materials purchased by contractors. A con- she may not use a resale certificate since the tractor is someone who works on the land and/ tools do not become a component part of her or buildings of another. Contractors (e.g., build- finished product. She must pay sales tax on ers, landscapers) must always pay sales tax on the tools. the materials and supplies they purchase unless the property being worked on belongs to a quali- • Services for resale fied exempt organization, a qualified urban enter- prise zone business, or a qualified housing spon- Example sor. See Contractor’s Exempt Purchase Certifi- Tom’s Gas Station is unable to complete all cate (Form ST-13) on page 15 and Contractor’s the repairs to a customer’s car. Tom sends the Exempt Purchase Certificate - Urban Enterprise car to a transmission specialist (Ace Trans- Zone (Form UZ-4) on page 16 for additional mission Repairs) who completes the work and information. returns the car to Tom’s Gas Station. Tom may issue a resale certificate to the transmis- NOTE: Fabricator/contractors (i.e., those who sion specialist and pay no sales tax when he build, sell, and install items such as pays for the parts and services. When Tom cabinets or heating ducts which be- bills his customer, he must charge sales tax come component parts of real proper- on the total bill (i.e., the charges for both ty) and floor covering dealers follow parts and labor). special rules for paying sales tax on materials and supplies. If Tom has the garage’s hydraulic lifts re- paired, he may not issue a resale certificate to Additional information for contractors, includ- the repairman since the service rendered will ing fabricator/contractors and floor covering not be resold. Tom must pay sales tax on the dealers, is contained in Tax Topic Bulletin price of the repair. S&U-3, Contractors and New Jersey Taxes, ANJ-4, Landscapers & New Jersey Sales Tax, See page 6 for an illustration of how Tom will and ANJ-5, Floor Covering Dealers. complete the Form ST-3 Resale Certificate he issued for the repair services purchased from • Raw Materials which will become compo- Ace Transmission Repairs. nent parts of the finished product Example Midge, a silversmith, purchases silver to make jewelry. She may issue her supplier Form ST-3 and pay no sales tax since the silver becomes part of the jewelry she is producing for resale. Rev. 4/04 5
  6. 6. Bulletin S&U-6 ST-3 (11-99, R-10) State of New Jersey DIVISION OF TAXATION The seller must collect the tax on a SALES TAX PURCHASER’S NEW JERSEY sale of taxable property or services CERTIFICATE OF AUTHORITY NUMBER unless the purchaser gives him a properly completed New Jersey FORM ST-3 exemption certificate. 222-678-901/000 RESALE CERTIFICATE To be completed by purchaser and given to and retained by seller. See instructions on back. Seller should read and comply with the instructions given on both sides of an exemption certificate. TO Ace Transmission Repairs Date 5/21/03 (Name of Seller) 163 Holland Ave. Budd Lake NJ 07828 Address City State Zip The undersigned certifies that: (1) He holds a valid Certificate of Authority (number shown above) to collect State of New Jersey Sales and Use Tax. (2) He is principally engaged in the sale of (indicate nature of merchandise or service sold): Motor fuels, supplies, and auto repairs (3) The merchandise or services being herein purchased are described as follows: Transmission repairs (4) The merchandise described in (3) above is being purchased: (check one or more of the blocks which apply) (a) † For resale in its present form. (b) † For resale as converted into or as a component part of a product produced by the undersigned. (c) † For use in the performance of a taxable service on personal property, where the property which is the subject of this Certificate becomes part of the property being serviced or is later transferred to the purchaser of the service in conjunction with the performance of the service. (5) The services described in (3) above are being purchased: (check the block which applies) (a) _ By a vendor who will either collect the tax or will resell the services. (b) † To be performed on personal property held for sale. I, the undersigned purchaser, have read and complied with the instructions and rules promulgated pursuant to the New Jersey Sales and Use Tax Act with respect to the use of the Resale Certificate, and it is my belief that the seller named herein is not required to collect the sales or use tax on the transaction or transactions covered by this Certificate. The undersigned purchaser hereby swears (under the penalties for perjury and false swearing) that all of the information shown in this Certificate is true. Tom’s Gas Station, Inc. NAME OF PURCHASER (as registered with the New Jersey Division of Taxation) 16 Beverly Dr., Budd Lake, NJ 07828 (Address of Purchaser) By Thomas Abbott President (Signature of owner, partner, officer of corporation, etc.) (Title) 6 Rev. 4/04
  7. 7. Sales Tax Exemption Certificates Resale Certificate for Non-New Jersey ernment, the United Nations, the State of New Vendors (Form ST-3NR) Jersey and any of their agencies as acceptable Form ST-3NR is used by qualified out-of-State proof of exemption from sales tax when making vendors to make tax-exempt purchases in New cash purchases of $150 or less instead of an offi- Jersey of goods or services purchased for resale. cial purchase order or contract. See Exempt Or- “Qualified out-of-State vendors” are vendors ganization Certificate (Form ST-5) on page 13. that (1) are not registered with New Jersey, • Advertising for Use Out of State: (2) are not required to be registered with New Jersey, and (3) are registered with another state. See Direct-Mail Advertising for Use Out of State on page 8. When a qualified out-of-State vendor carries the • Certain Aircraft: (a) Aircraft used by an air goods away with him from the point of sale, or carrier as defined by the Civil Aeronautics sends his own vehicle or messenger to pick Board or the Code of Federal Regulations them up in New Jersey, the only acceptable having its principal place of operations within resale certificate for the qualified out-of-State New Jersey and engaging in interstate, foreign, vendor to use is the Resale Certificate for Non- or intrastate air commerce. Repairs to such New Jersey Vendors (Form ST-3NR). The aircraft, including the installation of equip- ST-3NR requires the person picking up the mer- ment or machinery and replacement parts and chandise to provide acceptable identification labor therefor, are also exempt. (b) Repairs to (i.e., driver’s license of any state in the United aircraft having a maximum takeoff weight of States, major credit card including photograph, 6,000 pounds or more as certified by the or any identification card which includes a num- Federal Aviation Administration, including ber and a photograph and the bearer’s address). machinery or equipment installed on such air- Qualified out-of-State vendors may also use craft and replacement parts therefor. How- Form ST-3NR for drop-shipment sales in New ever, the exemption does not extend to pur- Jersey. See Issuing and Accepting Exemption chases of this class of aircraft. Certificates on page 2. • Certain Buses: Bus companies whose rates are regulated by the Interstate Commerce Exempt Use Certificate (Form ST-4) Commission or the Department of Transpor- Form ST-4 makes it possible for businesses to tation may purchase buses for public passen- purchase production machinery, packaging ger transportation with Form ST-4. This ex- supplies, and other goods or services without emption also applies to buses purchased by paying sales tax if the way they intend to use common or contract carriers who transport these items is specifically exempt under New children to and from school. Repair and Jersey law. The exemption does not apply to replacement parts for qualified buses as well services performed on the property, except as as labor charges associated with such repairs otherwise noted. are also entitled to exemption. In addition to the following qualified purchases, • Certain Chemicals and Catalysts: Form ST-4 may also be used by the Federal gov- Materials used to induce chemical or refining Rev. 4/04 7
  8. 8. Bulletin S&U-6 processes in which the materials are an essen- Example tial part of the process but do not become part Fred is a commercial trucker. He operates a of the finished product. vehicle which is registered in Pennsylvania and has a gross vehicle weight rating in excess • Commercial Fishing Boats: Certain boats, of 26,000 pounds. When Fred has repairs made including commercial party boats (headboats) in New Jersey, he may give his mechanic an engaged in sport fishing and subject to annual exempt use certificate instead of paying sales inspection by the U.S. Coast Guard, and ves- tax on the parts. Sales tax must be paid on the sels primarily engaged in commercial fishing charges for labor. As a qualified nonregistered or shellfishing. Also exempt are charges for purchaser, Fred will enter his social security repairs, alterations, reoutfitting of boats, fuel, number on Form ST-4. When Fred buys motor maintenance, and charges for supplies (other oil for his truck, he may not issue an exempt than articles purchased for the original equip- use certificate. Motor oil is a supply, and sales ping of a new ship). Equipment necessary for tax must be paid at the time of purchase. harvesting fish and shellfish may also be pur- chased with Form ST-4. • Commercial Printing: Machinery and equip- ment used by businesses engaged in commer- • Commercial Motor Vehicles: The purchase, cial printing, publishing of periodicals, books, rental, or lease of commercial trucks, tractors, business forms, greeting cards, or miscellane- trailers, and vehicles used in combination ous publishing, typesetting, photoengraving, with such, which are registered as required by electrotyping, stereotyping, and lithographic New Jersey law and have a gross vehicle platemaking, including supplies. weight rating of more than 26,000 pounds or are operated exclusively for the carriage of • Communications: Telephones, telephone interstate freight pursuant to Federal law are lines, cables, central office equipment, or exempt from tax. Repair parts and replace- station apparatus, or other machinery or ment parts are also exempt. The exemption equipment, including comparable telegraph also applies to trucks, trailers, and truck- equipment sold to a service provider subject trailer combinations that are used directly and to the jurisdiction of the Board of Public exclusively in the production for sale of tan- Utilities or the Federal Communications gible personal property on farms when the Commission, for use directly and primarily in vehicles have a gross vehicle weight rating in receiving at destination or initiating, transmit- excess of 18,000 pounds and are registered ting, and switching telephone, telegraph, or with the New Jersey Division of Motor Vehi- interactive telecommunications service for cles for farm use. A New Jersey Exempt Use sale to the general public. Certificate, Form ST-4, should be issued to • Direct-Mail Advertising for Use Out of the vendor at the time of purchase. The pur- chaser is not required to be registered with the State: Advertising or promotional materials State to issue Form ST-4 for the purchase of which are prepared within or outside of New commercial motor vehicles. Jersey by a New Jersey direct-mail advertis- ing or promotional firm for distribution out of 8 Rev. 4/04
  9. 9. Sales Tax Exemption Certificates State. The exemption applies to charges for brochures and sent them all to Smooth-Touch printing or production of advertising and in Pennsylvania, A-1 would not charge sales promotional materials whether prepared in tax on its fee for printing the brochures since New Jersey or shipped into this State after the material was shipped to a location outside preparation and stored for subsequent ship- New Jersey. ment to out-of-State customers. The exemp- tion also applies to direct-mail advertising • Certain Broadcasting Equipment: processing services performed in connection Machinery, apparatus, or equipment used di- with the distribution of advertising or pro- rectly and primarily in the production or motional materials to out-of-State recipients. transmission of radio or television broadcasts Direct-mail advertising processing services by commercial broadcasters operating under a include, but are not limited to, preparing and broadcasting license issued by the Federal maintaining mailing lists, addressing, sepa- Communications Commission or by providers rating, folding, inserting, sorting, and pack- of cable/satellite television program services. aging advertising or promotional materials. The exemption also applies to parts with a useful life of more than one year. Equipment Example used in the construction or operation of The A-1 advertising agency, located in towers does not qualify for the exemption. Trenton, New Jersey, produced a brochure • Film/Video Production: Tangible personal promoting the products of the Smooth-Touch Leather Company of Langhorne, Pennsylvania. property used directly and primarily in the A-1 also packaged, labeled, sorted, and mailed production of film or video for sale including the brochure to prospective customers whose motor vehicles, replacement parts (without names were selected from a mailing list pre- regard to useful life), tools, and supplies. pared and maintained by the agency. Of the Charges for installing, maintaining, servicing, 150,000 brochures distributed, 80% were or repairing such property are also exempt. mailed to addresses outside New Jersey. “Film or video” means motion pictures in- When A-1 bills Smooth-Touch, it must cluding feature films, shorts and documenta- charge sales tax on 20% of its fee for printing ries, television films or episodes, and similar the brochures since that is the percentage of film and video productions whether for broad- advertising material that was distributed in cast, cable, closed circuit, or unit distribution, New Jersey. A-1 must also charge sales tax and whether in the form of film, tape, or other on 20% of its fee for the direct-mail process- analog or digital medium. The exemption ing services performed in connection with does not apply to any film or video produced distributing the brochures. Separately stated by or on behalf of a corporation or other per- charges for the design and layout of the bro- son for its own internal use for training, ad- chure are nontaxable advertising services. vertising, or other similar purposes. • Film, Audio/Visual Material: Films, records, If A-1 performed no direct-mail advertising tapes, and other types of visual or sound processing services, but simply produced the transcriptions produced for exhibition in the- Rev. 4/04 9
  10. 10. Bulletin S&U-6 aters or for broadcast by radio or television • Wrapping/Packaging Materials: Wrapping stations or networks and not used for advertis- paper, bags, cartons, tape, rope, twine, labels, ing may also be purchased with Form ST-4. nonreturnable containers, and all other packag- ing supplies when the use of the supplies is • Limousines: Limousines sold to a person incidental to the delivery of merchandise. licensed under New Jersey law to operate a Storage containers are not considered to be limousine service and charges for the repair, packaging materials. However, containers including replacement parts, of a limousine used in a farming enterprise are exempt. operated by a person so licensed or by a per- son licensed by another state or by the United Example States to operate a limousine service. Henry Johnson owns a company (Crest A “limousine” is defined as (1) a motor vehi- Manufacturing, Inc.) that manufactures televi- cle registered under the provisions of N.J.S.A. sion sets. In order to deliver the sets to whole- 39:3-19.5, or registered as a limousine under salers, he must package them in cardboard the laws of another state or the United States; boxes and seal the boxes with tape. When and (2) used exclusively in the business of Henry purchases the boxes and rolls of tape, carrying passengers for hire to provide prear- he may issue his supplier an exempt use ranged passenger transportation at a premium certificate. However, he may not purchase the fare on a dedicated, nonscheduled, charter tape dispensers with Form ST-4 as these basis, that is not conducted on a regular route items are not part of the packaging used to and with a seating capacity of no more than deliver the television sets. 14 passengers, excluding the driver. See page 12 for an example of how Henry For purposes of the exemption, a limousine will complete Form ST-4 when purchasing does not include any taxicab, hotel or airport the packaging materials necessary to deliver shuttle or bus, or bus used solely to transport his television sets. children or teachers to and from school, nor • Production Machinery: Machinery and does it include any vehicle owned and op- equipment used directly and primarily in the erated without charge by a business entity for its own purposes. production of merchandise by manufacturing, assembling, processing, and refining. The • Newspaper Advertising: Advertising materi- exemption also applies to parts with a useful als to be published in a newspaper or maga- life of more than one year, and to imprinting zine, such as display or classified ads. services performed on such machinery. The exemption does not apply either to supplies or • Newspaper Production Machinery: to tools which are simple, hand-held, manu- Machinery and equipment used directly and ally operated instruments used in connection primarily in the production of newspapers, with the production machinery or equipment. including supplies. This machinery and equipment must be located in the production department of a newspaper plant. 10 Rev. 4/04
  11. 11. Sales Tax Exemption Certificates Example advertising, promotions, or research in con- Jim purchases a turret lathe for use in his ma- nection with literary, historical, or other chine business. He may issue his supplier an scholarly research done in fields other than exempt use certificate instead of paying sales science and technology. tax because the lathe will be used directly in Example the production of merchandise for sale. How- ever, Jim may not use Form ST-4 to purchase True Alloys, Inc. purchases materials from a forklift used exclusively to transport his which it will construct an apparatus that its final product from the warehouse to the research department will use to test the loading dock. strength of several new alloys the company is developing. True Alloys will issue an exempt • Recycling Equipment: Equipment which is use certificate to the supplier and not pay used exclusively to sort and prepare solid sales tax on the purchase since the materials waste for recycling or in the recycling of solid are being used directly in laboratory research. waste. Equipment used in the process after However, True Alloys must pay sales tax the first marketable product is produced or when it buys the special tools and dies needed equipment used to reduce iron or steel waste to construct the apparatus since the tools are to a molten state does not qualify. only incidental to research. • Research and Development: Tangible per- • Solar Energy Devices: Devices or systems sonal property purchased for use or consump- specifically approved by the Board of Public tion directly and exclusively in research and Utilities, Division of Energy and designed to development in the experimental or labora- provide heating or cooling or electrical or tory sense. Research and development in the mechanical power by converting solar energy experimental or laboratory sense means re- to some other usable energy source, including search and development work which has as devices for storing solar-generated energy. its goal or purpose: The purchaser is not required to be registered 1. Basic research in a scientific or technical with New Jersey to issue Form ST-4 to pur- field of endeavor; or chase solar energy devices. 2. The advancement of technology by Example experimentation in a scientific or Mary buys a solar energy collector to heat and technical field of endeavor; or cool her home. She may issue the supplier an 3. The development of new products; or exempt use certificate instead of paying sales 4. The improvement of existing products; or tax on the collector. However, she may not use 5. The development of new uses for existing an exempt use certificate to purchase insula- products. tion used to reduce heat loss through her walls, Research and development does not include roof, slab, or foundation. Since insulation is the ordinary testing or inspection of materials not directly used in the gathering, storing, or or products for quality control, efficiency sur- conversion of solar energy, sales tax must be veys, management studies, consumer surveys, paid when it is purchased. Rev. 4/04 11
  12. 12. Bulletin S&U-6 ST-4 (2-00, R-12) State of New Jersey DIVISION OF TAXATION ELIGIBLE NONREGISTERED PURCHASER’S NEW JERSEY PURCHASER: SEE INSTRUCTIONS** SALES TAX CERTIFICATE OF AUTHORITY NUMBER FORM ST-4 222-092-244/000 EXEMPT USE CERTIFICATE To be completed by purchaser and given to and retained by seller. Please read and comply with instructions on both sides of this Certificate. TO West End Packaging Date 5/19/03 (Name of Seller) 1166 Homer St. Hackettstown NJ 07840 Address City State Zip The undersigned purchaser certifies that there is no requirement to pay the New Jersey Sales and/or Use Tax on the purchase or purchases covered by this Certificate because the tangible personal property or services purchased will be used for an exempt purpose under the Sales & Use Tax Act. The tangible personal property or services will be used for the following exempt purpose: Delivering television sets. The exemption on the sale of the tangible personal property or services to be used for the above described exempt purpose is provided in subsection N.J.S.A. 54:32B- 8.15 (See reverse side for listing for principal exempt uses of tangible personal property or services and fill in the block with proper subsection citation). I, the undersigned purchaser, have read and complied with the instructions and rules promulgated pursuant to the New Jersey Sales and Use Tax Act with respect to the use of the Exempt Use Certificate and it is my belief that the seller named herein is not required to collect the sales or use tax on the transaction or transactions covered by this Certificate. The undersigned purchaser hereby swears under the penalties for perjury and false swearing that all of the information shown in this Certificate is true. Crest Manufacturing, Inc. NAME OF PURCHASER (as registered with the New Jersey Division of Taxation) 26 Eleventh Ave. Hackettstown NJ 07840 (Address of Purchaser) By Henry Johnson President (Signature of Owner, Partner, Officer of Corporation, etc. or qualified officer of Agency) MAY BE REPRODUCED (Front and Back Required) ý 12 Rev. 4/04
  13. 13. Sales Tax Exemption Certificates Exempt Organization Certificate Jersey political subdivisions and public schools. (Form ST-5) Documentation provided to exempt purchases An Exempt Organization Certificate, Form from sales tax is also sufficient to provide ST-5, is used by a qualified, registered nonprofit exemption from the occupancy fee/tax. organization to purchase, with its own funds, goods and services for its exclusive use without For more information on exempt organization paying sales tax. Some examples of organiza- certificates, request brochure M-5014, Exempt tions that may have exempt status are churches, Organization Certificate Form ST-5. hospitals, veterans’ organizations, and fire com- panies. When the organization makes purchases, Direct Payment Permit a photocopy of the Form ST-5 is given to the (Forms ST-6A and ST-6X) supplier in lieu of paying sales tax. The holder of a valid Regular Direct Payment Permit may issue Form ST-6A at the time of NOTE: State Occupancy Fee/Municipal purchase in those cases where the taxable status Occupancy Tax. Although qualified of the purchase is not known at the time of pur- nonprofit organizations are exempt from chase. (The holder of a valid Audit Direct Pay- New Jersey sales tax under the New ment Permit may issue Form ST-6X at the time Jersey Sales and Use Tax Act, these of purchase according to the terms of the organizations are not exempt from the taxpayer’s audit agreement governing use of the State occupancy fee or the municipal certificate.) occupancy tax. Thus the ST-5 cannot be To obtain a Regular Direct Payment Permit, used to exempt a qualified nonprofit complete an Application for Direct Payment organization from paying either the fee Permit, Form ST-6B, and mail to: or the tax. NEW JERSEY DIVISION OF TAXATION Form ST-5 is not required for the United States PO BOX 264 or State of New Jersey departments or agencies, TRENTON NJ 08695-0264 or New Jersey political subdivisions or public schools to make tax-exempt purchases. Payment An application for a Regular Direct Payment from government funds with the official letter- Permit may be filed only by registered busi- head or purchase order signed by a qualified nesses that acquire tangible personal property or officer is sufficient proof for the vendor of the services under circumstances which make it exemption from paying the sales tax. For cash impossible at the time of purchase to determine purchases of less than $150, a Form ST-4, the taxable status of the property or services. Exempt Use Certificate, signed by a qualified government or school official is satisfactory. NOTE: The holder of a Regular Direct Payment There is an exemption from paying the State Permit may not use Form ST-6A to pur- occupancy fee and the municipal occupancy tax chase goods that are clearly taxable at for agencies and instrumentalities of the United the time of purchase, such as office equip- States and the State of New Jersey, and New ment and supplies, repair services, etc. Rev. 4/04 13
  14. 14. Bulletin S&U-6 A list of Direct Payment Permit Holders is results in a capital improvement. A capital im- available at: provement occurs when real property (land or buildings) is improved in a way that increases its capital value or useful life. A property owner Farmer’s Exemption Certificate issues Form ST-8 to the contractor and does not (Form ST-7) pay sales tax on the labor portion of the contrac- Farmers, including nursery owners and green- tor’s bill. Sales tax is paid on the materials at the house owners, use this exemption certificate to time of purchase by the contractor or by any purchase goods and certain services used directly other individual making the purchase. A prop- and primarily for the production, handling, and erty owner does not need to register with New preservation for sale of agricultural or horticul- Jersey to issue Form ST-8. tural commodities. The exemption applies only to purchases by the farmer; it does not apply to For more information on capital improvements, purchases by contractors or others doing work request Tax Topic Bulletin S&U-2, Sales Tax for the farmer. A farmer does not need to be and Home Improvements. registered with the State to issue Form ST-7. Motor Vehicle Sales and Use Tax The exemption does not apply to purchases of Exemption Report (Form ST-10) automobiles, energy, or materials which will be Form ST-10 is used by registered motor vehicle incorporated into a building or structure. How- dealers to report sales tax exemptions to the ever, farmers may issue Form ST-7 to purchase Division for nonresidents who have purchased materials to construct a silo, greenhouse, grain and taken delivery of motor vehicles in this State. bin, or manure handling facility that is to be The purchaser signs Form ST-10 certifying that used directly and primarily in the production, he/she is a nonresident and meets all the require- handling, or preservation of farm commodities ments for claiming a sales tax exemption. See for sale. This exception for certain construction Good Faith on page 3. materials applies only to purchases by farmers; it does not apply to purchases by contractors. NOTE: If a person has homes in both New Jersey and another state (e.g., owns a For more information about exempt purchases house in New Jersey, but spends the of certain commercial vehicles, including winters in Florida), he or she is not certain vehicles registered for farm use, see entitled to a sales tax exemption as a Commercial Motor Vehicles on page 8. “nonresident.” Certificate of Capital Improvement For more information on sales tax and motor (Form ST-8) vehicles, see the New Jersey Sales & Use Tax A Certificate of Capital Improvement, Form Guide for Automobile Dealers, available at: ST-8, is issued by a property owner to a contrac- tor when work is done to real property which 14 Rev. 4/04
  15. 15. Sales Tax Exemption Certificates Aircraft Dealer Sales and Use Tax resident purchaser maintains a summer home or Exemption Report (Form ST-10-A) other place of abode in New Jersey. Form ST-10-A is used by registered aircraft Example dealers to report exempt sales of airplanes. James T. Anderson of Pennington, New Jersey, When a nonresident comes into New Jersey and purchased a 32-foot motorized sailboat from purchases an airplane, no sales tax is due pro- Luxury Crafts LTD, a registered vessel dealer vided the purchaser will base the airplane in located in Toms River, New Jersey. The sales another state. If the nonresident purchaser bases contract for Jim’s new boat specifies that the the airplane in New Jersey within 12 months of vessel will be transported by Luxury Crafts to a the date of sale, the exemption is voided and marina in Boca Raton, Florida, and delivered sales tax plus penalty and interest charges are there to Mr. Anderson for use in that state. Lux- due on the purchase price of the aircraft. ury Crafts will complete a Vessel Dealer Sales Vessel Dealer Sales and Use Tax and Use Tax Exemption Report (Form ST-10V) Exemption Report (Form ST-10V) and not charge sales tax on the transaction. Mr. Form ST-10V is used by registered vessel Anderson also signs the Form ST-10V certifying dealers to report exempt sales of boats. An ex- that the requirements for the sales tax exemption empt sale is one made to a New Jersey resident have been met. who purchases the boat in New Jersey for use Contractor’s Exempt Purchase outside New Jersey and, as part of the sales con- Certificate (Form ST-13) tract, the dealer transports the boat out of State Form ST-13 is used by registered contractors to or the dealer arranges to have the boat trans- purchase materials, supplies, or services for use ported out of State. Sales tax is due if the resi- in performing work on the real property of a dent purchaser does not pay sales or use tax on qualified exempt organization (an organization the boat in another state and then subsequently which holds a valid New Jersey Exempt Organi- brings the boat back to New Jersey for use in zation Certificate, Form ST-5); or for a Federal this State, even on a limited basis. or New Jersey governmental entity; or for a Also exempt is a sale made to a nonresident qualified housing sponsor. The contractor pro- who purchases the boat in New Jersey with the vides Form ST-13 to his supplier and does not intention of basing it in his or her state of resi- pay sales tax on the purchase price provided the dence. This exemption applies whether the non- materials will be entirely used or consumed on resident purchaser takes possession of the boat the job contracted for by the exempt organiza- in New Jersey or contracts with the dealer to tion. Form ST-13 must include the exempt orga- have it delivered out of State. If the nonresident nization number shown on Form ST-5 or, if the purchaser bases the boat in New Jersey within work is being done for a qualified government 12 months of the date of sale, the exemption is agency, the agency’s purchase order number. voided and sales tax plus penalty and interest charges are due on the purchase price of the Form ST-13 may not be used to rent machinery boat. The exemption does not apply if the non- or equipment or to purchase tools or materials such as hammers and tarpaulins (rain covers) Rev. 4/04 15
  16. 16. Bulletin S&U-6 which may be used on other jobs. For more order to document the exemption, the qualified information on Contractor’s Exempt Purchase Urban Enterprise Zone business provides its Certificates, request Tax Topic Bulletin S&U-3, vendor with a completed and executed copy of Contractors and New Jersey Taxes. its Urban Enterprise Zone Exempt Purchase Certificate (Form UZ-5). The transaction must Exemption Certificate for Student be completed by delivery within the effective Textbooks (Form ST-16) dates on the UZ-5. Finally, this certificate is not The sale of textbooks for use by students in a available to vendors located within Urban Enter- school, college, university, or other educational prise Zone-impacted business districts. institution, approved as such by the Department of Education, is exempt from sales tax. When Contractor’s Exempt Purchase the educational institution declares that the books Certificate — Urban Enterprise Zone are required reading for school purposes, the pur- (Form UZ-4) chaser may issue the vendor Form ST-16 and not A contractor issues a properly completed Con- pay sales tax. The purchaser is not required to be tractor’s Exempt Purchase Certificate - Urban registered with New Jersey to issue Form ST-16. Enterprise Zone (Form UZ-4) to suppliers when purchasing materials which will be incorporated Urban Enterprise Zone Exempt into real property, supplies which will be entirely Purchase Certificate (Form UZ-5) used or consumed on the job, or services for use Under the Urban Enterprise Zones Act, a quali- in performing work for a qualified business at fied business is entitled to an exemption from the business’s real property in an Urban Enter- sales and use tax on purchases of taxable tan- prise Zone. The exemption does not apply to gible personal property (other than motor vehi- equipment that the contractor rents or leases to cles and motor vehicle parts and supplies) and perform work for a qualified business. The con- taxable services (except telecommunications tractor can only obtain Form UZ-4 from a quali- services) for exclusive use or consumption on fied business. The contractor also issues copies the premises of the qualified business at its zone of Form UZ-4 to subcontractors for their use in location. This exemption does not apply to gas making exempt purchases for the job. Subcon- or electricity used by the qualified business at its tractors must attach their name, address, and zone location. Only personal property controlled certificate of authority number (in addition to by the qualified business qualifies for the ex- the name, address, and number of the contrac- emption. Tangible personal property includes tor) and then give the UZ-4 and attachments to items such as construction materials, office their vendors. Finally, this certificate is not supplies, office or business equipment, office available to vendors located within Urban Enter- and store furnishings, trade fixtures, cash reg- prise Zone-impacted business districts. isters, etc. Exempt services performed for a For more information on exemption certificates qualified business at its zone location include used by qualified businesses located within an items such as janitorial and maintenance ser- Urban Enterprise Zone, see Urban Enterprise vices, installing, maintaining, or repairing tan- Zone Tax Questions and Answers, available at: gible personal property used in business, etc. In 16 Rev. 4/04
  17. 17. Sales Tax Exemption Certificates For More Information By Phone Online • Call the Division of Taxation’s Customer • Division of Taxation Web site: Service Center at 609-292-6400 • TTY equipment users call 1-800-286-6613 • E-mail: (within NJ, NY, PA, DE, and MD) or • Subscribe to NJ Tax E-News, the Division 609-984-7300 (anywhere) of Taxation’s online information service, at: listservice.shtml In Writing New Jersey Division of Taxation Information and Publications Branch PO Box 281 Trenton, NJ 08695-0281 Order Forms and Publications • Call the Forms Request System at • Call NJ TaxFax at 609-826-4500 from your 1-800-323-4400 (Touch-tone phones within fax machine’s phone NJ, NY, PA, DE, and MD) or • Visit the Division of Taxation’s Web site: 609-826-4400 (Touch-tone phones anywhere) Rev. 4/04 17