Does New Jersey charge sales tax on shipping?
New Jersey Sales Tax is imposed on the charges for delivery of property (or services) from a seller directly to a customer if the items sold are subject to tax. Tax is not imposed on delivery charges for nontaxable items.
If the items are delivered to a New Jersey address, the purchaser must pay Use Tax based on the purchase price, including any delivery/shipping charges.
Delivery–related charge is not taxable when:
Your invoice clearly lists delivery, shipping, freight, or postage as a separate charge; The charge is not greater than your actual cost for delivery to customer.
New Jersey assesses a 6.625% Sales Tax on sales of most tangible personal property, specified digital products, and certain services unless specifically exempt under New Jersey law.
Sales tax generally does not apply to your transaction when you sell a product and ship it directly to the purchaser at an out-of-state location, for use outside California.
Some goods are exempt from sales tax under New Jersey law. Examples include clothing and footwear, most non-prepared food items, food stamps, and medical supplies. New Jersey also offers a partial exemption for certain products, such as boats.
Alabama, Alaska, Arizona, California, Delaware, Idaho, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Missouri, Montana, Nevada, New Hampshire, Oklahoma, Oregon, Utah, Virginia and Wyoming. Where a U.S. seller pays for shipping the majority of states do not charge sales tax.
Your business, like 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.
New Jersey sales tax details
The New Jersey (NJ) state sales tax rate is 6.625%. Unlike many states, NJ does not allow the imposition of local sales tax—the entire state has a single rate.
Section 18:24-12.7 - Gratuities and service charges (a) Any charge made to a customer is taxable as a receipt from the sale of food or drink unless: 1. The charge is separately stated on the bill or invoice given to the customer; and 2. The charge is specifically designated as a gratuity; and 3.
Is sales tax determined by shipping address or billing address?
In a destination-based (or interstate) ecommerce transaction, the location where your customer takes possession of the product is the point of taxation. This is the shipping address, meaning your business would use this address to calculate sales tax, not the billing address.
| STATE | IS SHIPPING TAXABLE? |
|---|---|
| California | No |
| Colorado | No |
| Connecticut | Yes |
| Delaware | Not applicable |
Rules vary widely from state to state for the physical delivery of goods. Many states say that when the contents of a shipment are taxable, so is the shipping cost; similarly, when items in a shipment are exempt from sales tax, so is the cost of shipping.
The tax rate applied to your order will be the combined state and local rates of the address where your order is delivered to or fulfilled from. For example, if you live in a state that does not impose a sales tax, you may still see tax calculated on your order if shipped to another state.
According to California's sales tax collection agency, the Board of Equalization, sales tax should be collected when a seller “makes a combined charge for 'shipping and handling' or 'postage and handling,' ” if the invoice does not show the actual cost of the individual delivery.
The gross sales formula is calculated by totaling all sale invoices or related revenue transactions. However, gross sales do not include operating expenses, tax expenses, or other charges, which are all deducted to calculate net sales.
If the internet retailer does not have a physical business presence in New Jersey and is not registered with the State, the seller does not collect Sales Tax on items delivered into the State, and the customer must pay Use Tax to New Jersey.
For most sales tax is due in the state where the customer takes possession or delivery of the items they purchased. According to the state of New Jersey, any tangible property serviced or repaired in New Jersey and delivered to the purchaser outside of New Jersey is exempt from New Jersey sales tax.
- Accounting services, such as electronic filing charges.
- Admission charges for spectator sports (like baseball and basketball games) and places of amusem*nt (like movie theaters and trade shows)
- Alarm monitoring.
Alaska, Delaware, Montana, New Hampshire and Oregon are the only states that do not charge a sales tax.
Is there tax on USPS?
When a person purchases stamps for the purpose of postage, the true object is to obtain the performance of postal service. Gross receipts from the sale of U.S. Postal Service stamps sold for the purpose of postage are not subject to tax.
Are shipping and handling taxed as well? Each state's legislation dictates if shipping and handling are taxable or not. In those states where eBay is collecting tax, we will collect tax on shipping and handling where applicable.
Online-only businesses generally do not require a specific state license unless you are selling a regulated product or service. The license and certification guide has details on specific businesses.
New Jersey requires all vendors, even seasonal businesses and one-time vendors, to register with the state for tax purposes at least 15 business days before starting business, and to collect New Jersey sales tax on all sales of taxable tangible personal property or services.
The sales tax rate in New Jersey is 6.625% statewide. There are no local rates. To calculate the sales tax on a $100 purchase in New Jersey, you would do the following: Tax = 6.625% x $100 = $6.625.
