³Ô¹ÏºÚÁÏ

Why Would You Owe Use Tax?

You owe Use Tax if you bought a taxable item or service outside of ³Ô¹ÏºÚÁÏ and:

1. You didn’t pay sales tax of any kind, or
2. You paid sales tax to another jurisdiction at a rate lower than ³Ô¹ÏºÚÁÏ’s.

What Is The Use Tax Rate?

The Use Tax rate is the same as our Sales Tax rate:

• 6.625% on purchases made in 2018 and after (See rate chart .)

How Do You Calculate Use Tax?

You calculate the Use Tax by using the ³Ô¹ÏºÚÁÏ Sales Tax rate effective at the time of purchase. See the rates above.

1. If you paid no sales tax of any kind on a taxable purchase from an out-of-state company, then the purchase is taxed at the State’s full Sales Tax rate in effect at the time.

   Example 1: ³Ô¹ÏºÚÁÏ resident Gabriel bought $1,000 in taxable goods before January 1, 2018, from the catalog of an out-of-state company that collected no sales taxes on the purchase. 6.875% was the ³Ô¹ÏºÚÁÏ Sales Tax rate in effect at the time of purchase.

   This is the Use Tax calculation for the purchase:

   $1,000 x 0.06785 (6.785% ³Ô¹ÏºÚÁÏ Sales Tax rate due at the time) = $67.85 (Amount of Use Tax owed to ³Ô¹ÏºÚÁÏ)

2. If you paid sales tax on an out-of-state purchase, but the amount paid to the out-of-state jurisdiction was less than ³Ô¹ÏºÚÁÏ would have collected in tax on the purchase, then you owe ³Ô¹ÏºÚÁÏ Use Tax. To calculate ³Ô¹ÏºÚÁÏ Use Tax on purchases on or after January 1, 2018, do the following:

   Multiply the purchase price (including delivery charges) before tax by the ³Ô¹ÏºÚÁÏ Sales Tax Rate in effect at the time. This gives you the amount of tax that would have been charged if the purchase had been made in ³Ô¹ÏºÚÁÏ. Then subtract the amount of sales tax paid out of state from the ³Ô¹ÏºÚÁÏ figure. This will be the amount of Use Tax you owe to ³Ô¹ÏºÚÁÏ.

   Example 1: ³Ô¹ÏºÚÁÏ resident Selena went online after January 1, 2021, to buy $1,000 in taxable goods from an out-of-state seller that collected 6% in sales taxes for jurisdictions outside ³Ô¹ÏºÚÁÏ. The seller did not collect ³Ô¹ÏºÚÁÏ taxes.

   This is the Use Tax calculation for the purchase:

   ³Ô¹ÏºÚÁÏ Sales Tax due at the time: $1,000 x 0.06625 (6.625%) = $66.25

   Out-of-state sales tax collected: $1,000 X 0.06 (6%) = $60.00

   $66.25 - $60 = $6.25 (Amount of Use Tax owed to ³Ô¹ÏºÚÁÏ)

---

How Do You Pay Use Tax?

Businesses

You can access the ³Ô¹ÏºÚÁÏ Portal to file and pay Use Tax using Form ST-18B (Sales and Use Tax-Business Use) if your business:

1. Didn’t sell taxable goods or services or lease taxable property to others during the tax year.
2. Averaged less than $2,000 in annual Use Tax liability in the last three years; and
3. Owes Use Tax for the current year.

If you do not meet the criteria above you cannot use Form ST-18B, and you must change your business registration to include a quarterly/monthly Sales Tax filing.

Individuals

You may report and pay any Use Tax due for purchases made during the tax year when filing your ³Ô¹ÏºÚÁÏ Resident Income Tax Return
(Form NJ-1040). Keep receipts to document your purchase. If you don't know the exact amount of your purchase, see the Estimated Use Tax Chart to estimate the amount to report.

If you do not file a ³Ô¹ÏºÚÁÏ Income Tax Return, or you would like to pay Use Tax soon after you take possession, you can remit Use Tax using Form ST-18.

Estimated Use Tax Chart
If your ³Ô¹ÏºÚÁÏ Gross Income is:	Use Tax Due is:
up to $15,000	$14
$15,001 - $30,000	$44
$30,001 - $50,000	$64
$50,001 - $75,000	$84
$75,001 - $100,000	$106
$100,001 - $150,000	$134
$150,001 - $200,000	$170
$200,001 and over	0852% (.00852) of income, or $494, whichever is less.