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Can I collect sales tax from customers in different states without violating tax laws in New Jersey? What are the requirements?

Requirements for Collecting Sales Tax from Customers in Different States without Violating Tax Laws in New Jersey

If you are a business owner in New Jersey and want to collect sales tax from customers in different states, you must ensure that you comply with the tax laws in both New Jersey and the state where your customers are located.

According to [2.1]" >NJST 54:52-14, failure to collect or withhold any State tax with the intent to evade, avoid, or otherwise not make timely payment of any tax, fee, penalty or interest, or any part thereof is a crime of the third degree. Therefore, it is crucial to understand the requirements for collecting sales tax from customers in different states to avoid violating tax laws in New Jersey.

In general, if your business has a physical presence in a state, such as a store, warehouse, or office, you are required to collect sales tax on sales made to customers in that state. This is known as having “nexus” in the state. However, if you do not have nexus in a state, you generally do not have to collect sales tax on sales made to customers in that state.

However, some states have enacted laws requiring out-of-state sellers to collect sales tax if they meet certain criteria, such as making a certain amount of sales or having a certain number of transactions in the state. For example, according to [4.1]" >NJST 54:47B-5, every distributor of seed potatoes shall charge and collect, or pay, as the case may be, and shall be liable for, the tax imposed by this act on all seed potatoes handled by him as a distributor of seed potatoes.

To determine if you are required to collect sales tax in a particular state, you should consult with a tax professional or review the specific laws of that state. Additionally, according to [5.1]" >NJST 54A:8-10, a nonresident taxpayer shall file the estimated tax form with the county.

Conclusion

In summary, to collect sales tax from customers in different states without violating tax laws in New Jersey, you must comply with the tax laws in both New Jersey and the state where your customers are located. The requirements for collecting sales tax from customers in different states depend on various factors, including whether your business has nexus in the state and whether the state has enacted laws requiring out-of-state sellers to collect sales tax. It is recommended that you consult with a tax professional or review the specific laws of each state to determine your obligations.

Source(s):
Jurisdiction

New Jersey