Taxes and Annual Report

Your New Jersey deadlines will depend on your business structure, if you collect sales tax, or if you have employees. There are 3 main types of taxes your business may need to file:

1. Income Tax: Taxes collected on your business’s net income and profits
2. Sales and Use Tax: Taxes paid for the sale of taxable goods and services
3. Payroll Taxes and Wage Withholding: Taxes held on your payroll (if you have employees)
4. Specialty Taxes: Taxes unique to certain services or industries

Tax Information Packet

A tax information packet is available that includes the information needed to register your business with the New Jersey Division of Taxation. Descriptions of all state taxes are included, as well as tax tables and general state tax information. Employers can avoid future tax problems by knowing what the business tax responsibilities are and how to best meet them. For details or questions, call the Tax Hotline at 609-292-6400 or New Jersey’s Automated Tax Information System at 800-323-4400.

Income Tax

Sole proprietorships, general partnerships, and single-member LLCs will file their business taxes with their personal taxes.

Multi-member LLCs need to file information on their partners' gross-income tax.

C-Corp Businesses Filing Taxes

The State’s tax rate is 9% based upon the entire net income or the portion of the entire net income allocated to New Jersey.

Taxes for multi-state corporations are apportioned using a three-factor formula of sales, property, and payroll. In New Jersey, this apportionment is weighted at 50:25:25. New Jersey allows corporations to carry forward losses from prior years. New Jersey has research and development credits capped at 50% of tax liability.

Find out more about New Jersey's corporate tax rates.‍

File C-Corp taxes with the New Jersey Division of Taxation

If selling taxable items or services in New Jersey, businesses are required to collect and remit a sales tax to the State. The sales tax rate is 6.625%. Reduced taxes (50% of the regular rate) may apply to transactions taking place within an Urban Enterprise Zone (UEZ) and involving a certified UEZ Business. Learn more about the New Jersey Sales and Use Tax and find the current rates.

Filings

You must file a New Jersey Sales and Use Tax Quarterly Return with Form ST-50 every 3 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 2 months of the quarter (Form ST-51). This applies to you if your 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.  

Exemptions

Certain production machinery and most packaging supplies are exempt from sales tax because of their intended use. You may use an Exempt Use Certificate (Form ST-4) when purchasing these items and pay no sales tax. Other common uses of the Exempt Use Certificate are listed on the back of the certificate.

NOTE: There are special exemption certificates for use by registered exempt organizations (FORM ST-5) and contractors doing work for exempt organizations (Form ST-13).

If you have an employee that is a resident subject to New Jersey taxes, you need to pay payroll and wage withholding taxes. This is true even if your business is out of state. Read more about withholding taxes.

If you are unsure about the status of your employee and whether you need to complete payroll taxes, please refer to the circumstances listed under the ABC test.

There are other unique taxes you may qualify for; you should have identified these when you registered for State taxes. Examples include:

• Admissions surcharge
• Cigarette tax
• Litter control fee
• Tobacco and vapor product tax
• Occupancy tax for hotels and motels‍‍
  

Premier Business Services (PBS) provides access to your tax records, and lets you make tax payments, request tax clearance certificates, and register as an Urban Enterprise Zone business. You can also give employees, payroll companies, or tax professionals limited access to PBS on your behalf.

To access PBS you must:

• Setup a myNewJersey account (myNewJersey is the State's secure login platform)
• Add a PBS account to your MyNewJersey account
• Add your business to your PBS account

To add a business to your PBS account, you must have registered for State taxes. You will need your:

• NJ Tax ID # (which is the same as your EIN and 3-digit location code)
• Business Name
• A PIN # (this was provided when you registered for State taxes)

OR

• Chosen business structure
• Year your business operations started in New Jersey
• Zip code (where you receive tax notices and forms)

Need more help?

Premier Business Services (PBS) is the State’s electronic tax filing and payment platform, and shows your tax filing/payment history. This video provides information on what you need to get started and how to navigate the tool.

• Important Timestamps:
• 1:22 What do I need to set up a PBS account
• 2:29 Learn how to set up a PBS account
• 6:55 Access your PBS account once it's set up
• 7:30 Change the primary representative of your PBS account

The New Jersey Taxpayers' Bill of Rights ensures you have the right to access information about your taxes, including details about your tax situation, how your liability is determined, any notices from the Division of Taxation, and your rights and responsibilities as a taxpayer. Here are the key points simplified:

• Reliance on written advice: Penalties and interest will be waived if you can show that you reasonably relied on written advice from the Division that ultimately proved to be erroneous, provided the advice was not the result of your failure to provide adequate or accurate information.
• Interview rights: You may have an attorney and/or accountant with you at any conference. You may record the interview if prior notice has been given.
• Registered or certified mail: Final audit notices and "Notice and Demand for Payment of Tax" letters will be sent by registered or certified mail.
• Payment agreements: Requests for payment agreements will be reviewed on a case-by-case basis. If a payment agreement is set up for you, it will include your unpaid tax, any penalties you owe, and interest. You should be aware that although a payment agreement extends the time to pay your liability, interest continues to accrue until the liability is paid in full.
• Legal action against the Division: If a Division employee knowingly and recklessly disregards any tax law or fails to release a lien, a taxpayer may sue for damages.
• Appeal rights: If you disagree with a determination made by the Division, you may file a proper, written protest and request an informal administrative conference with the Conference and Appeals Branch or file an appeal with the required fee to the Tax Court.‍
• Penalties, interest, and collection fees: Your first underpayment notice is comprised of tax, interest, and a late filing penalty (5% per month up to 25%). If a bill is not paid by the “Pay By” date indicated, an additional late payment penalty of 5% will apply. A $100 per month penalty also may be imposed for each month (or a fraction thereof) the return is late. The annual interest rate is 3% above the prime rate. Interest is imposed on every month or fraction of a month the tax is unpaid, compounded annually. If your tax bill is sent to our collection agency, a referral cost recovery fee of 11% of the tax due will be added to your liability. If a certificate of debt is issued for your outstanding liability, a fee for the cost of collection of the tax also may be imposed.

Key dates and deadlines with the US Internal Revenue Service (IRS) will depend on your business type, how your business is structured, and whether you have any employees.

For more information about your Federal tax responsibilities, find information about business taxes by the IRS.

Typically, cities or towns do not charge business taxes directly. Revenues for the city or town come from property taxes, which a business owner may be responsible for paying based on the property you own or lease within the municipality.

There may be fees associated with owning a business within a municipality, including fire protection or mercantile licenses. When planning, you should do your due diligence to identify local ordinances that may apply to your business. Contact your Municipal Clerk for additional information.

Payment In Lieu of Taxes/Long-Term Property Tax Abatement

Property tax abatement reduces or removes tax payments for a specified period of time. The abatement is discussed in advance and requires the town to authorize it. This abatement is provided through annual Payments in Lieu of Taxes (PILOT).

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Though your specific business may require that you keep additional records, at a minimum, you will need to keep:

• State and Federal tax returns
• Requests for credit to vendors
• Loan requests to banks
• Balance sheets (a record of assets, liabilities, and capital)
• Income Statement (a summary of your earnings and expenses over a period of time)

A qualified accountant can advise you on taxes and the health of your business.

You may also need the following documents:

• Business Registration Certificate (useful if you are looking into public contracting)‍
• Standing Certificates (may be helpful to confirm corporate status)