Client Alert Winter 1998 New Jersey Audit Program Focuses on Use Tax

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Client Alert - Winter 1998

New Jersey Audit Program Focuses on Use Tax
By: Michelle Harvey

When the New Jersey Division of Taxation conducts tax audits, it often reviews the reporting and remittance of use tax. Any taxpayer residing in New Jersey is required to pay a use tax when taxable goods or services are purchased and the vendor does not charge sales tax. This generally occurs in mail-order situations and whenever an out-of-state vendor is used to place an order that is subsequently mailed or shipped to New Jersey. The New Jersey Sales and Use Tax Act (N.J.S.A. 54:32B-1) does not exempt items purchased out-of-state for use in New Jersey (such as office supplies, furniture and equipment) from sales and use tax.

Use tax is calculated at the same rate as sales tax, currently 6%, and can be reported and remitted on several different forms. The most common are Forms ST-18 and ST-50. Certain non-vendor taxpayers may qualify to report and remit use tax annually on Form ST-18B. Individuals may elect to report and remit use tax on Form NJ-1040. If you would like more information on use tax reporting requirements, please give us a call.

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