How to Pay New Jersey Sales Tax
Where and when New Jersey sales tax gets paid
New Jersey sales tax is collected by the retailer at the point of sale, not paid directly by you as a consumer. If you are a business owner or seller, you collect the tax from customers and then send it to the New Jersey Division of Taxation. The tax rate is 6.625% statewide, though some counties add local tax on top of that.
If you run a business in New Jersey, you must register for a sales tax permit before you start selling. Once registered, you file returns and pay the tax you collected on a monthly, quarterly, or annual schedule depending on your sales volume. The Division of Taxation sets your filing frequency based on how much tax you owe.
Payments are due on the 20th of the month following the period you are reporting. For example, if you collected tax in January, your payment is due by February 20th. If you miss the deadline, penalties and interest begin to accrue immediately.
Key Takeaways
- As a consumer, you do not pay sales tax directly to the state—the retailer collects it and remits it to New Jersey.
- If you own a business, you must register for a sales tax permit with the New Jersey Division of Taxation before selling anything.
- Payments are due on the 20th of the month after the reporting period ends, and late payments trigger penalties and interest.
- You can pay online through the Division of Taxation's portal, by check, or by electronic funds transfer, depending on your account type.
- The state offers a 5% discount on sales tax if you pay by the 10th of the month following the reporting period.
How to register for a sales tax permit
To register, you go to the New Jersey Division of Taxation website and complete the Business Registration Application. You will need your Social Security Number or Federal Employer Identification Number (EIN), your business address, and details about what you sell. The application is free and takes about 15 minutes to complete online.
Once you submit, the Division of Taxation reviews your application and mails you a sales tax permit. This permit is your proof that you are registered to collect and remit sales tax. You must display it at your place of business and include the permit number on all sales tax returns. If you operate multiple locations, you need a separate permit for each one.
Registration is immediate for online applications, but the physical permit arrives by mail within one to two weeks. You can start collecting tax as soon as you receive your permit number, even if the card has not arrived yet.
Payment methods and where to send money
The New Jersey Division of Taxation offers three main ways to pay: online through their portal, by check mailed to the state, or by electronic funds transfer (EFT) if you are a larger filer. The online portal is the fastest and most reliable method because you get immediate confirmation of payment.
To pay online, log into your account on the Division of Taxation website using your permit number and password. You enter the amount owed, select your payment date, and submit. The system accepts credit cards, debit cards, and bank transfers, though credit and debit card payments charge a convenience fee of about 2.5% to 3%.
If you pay by check, mail it to the New Jersey Division of Taxation at the address listed on your return. Write your permit number on the check. Checks must arrive by the 20th to be considered on time. If you owe a large amount of tax regularly, you can set up electronic funds transfer, which pulls money directly from your business bank account on the due date.
The 5% discount for early payment
New Jersey offers a 5% discount on the sales tax you owe if you pay by the 10th of the month following the reporting period. This is one of the most generous early-payment discounts in the country, and it applies whether you pay online, by check, or by EFT.
The discount is automatic—you do not have to request it or fill out a separate form. When you pay by the 10th, the Division of Taxation calculates the discount and credits it against your account. If you owe $1,000 in sales tax and pay by the 10th, you pay $950 instead. The discount applies to the sales tax itself, not to any penalties or interest you may owe from a prior period.
This discount is worth planning for. If your cash flow allows, paying early saves real money. Many business owners set a calendar reminder for the 10th to ensure they do not miss the deadline.
What happens if you pay late
If your payment does not arrive by the 20th, the Division of Taxation charges a penalty of 5% of the unpaid tax, plus interest at 6% per year. The interest compounds daily, so the longer you wait, the more you owe. A $1,000 payment that is 30 days late costs you an extra $55 or more in penalties and interest alone.
If you are consistently late, the Division of Taxation may require you to file returns more frequently—for example, switching you from quarterly to monthly filing. They may also require you to pay by electronic funds transfer so the payment is automatic. Repeated late payments can result in the revocation of your sales tax permit, which means you cannot legally collect or sell in New Jersey.
If you know you will be late, contact the Division of Taxation before the due date. They sometimes grant short extensions or set up payment plans for businesses facing temporary hardship. Calling ahead is always better than ignoring the deadline.
Understanding your sales tax return
Your sales tax return shows the total sales you made during the reporting period, the tax you collected, and the tax you owe. The return also lists any deductions you are may have access to to, such as sales to other businesses that are reselling the goods, or sales that are exempt under state law.
You file your return on the same schedule you pay: monthly, quarterly, or annually. The return is due on the 20th of the month following the period. You can file online through the Division of Taxation portal, by mail, or by phone for very small filers. Online filing is fastest and gives you a confirmation number immediately.
Keep records of all your sales, tax collected, and deductions for at least four years. The Division of Taxation can audit your returns at any time, and having clear records protects you if questions arise.
Exemptions and special situations
Some sales are exempt from New Jersey sales tax. Groceries, prescription medications, and certain medical equipment do not have sales tax. If you sell these items, you do not collect tax from the customer, and you do not report them on your sales tax return. However, you must have documentation from the customer stating they are buying for an exempt purpose.
If you sell to another business that will resell the goods, that sale is also exempt. The buyer gives you a resale certificate, which you keep on file. You do not collect tax on that sale. If you sell to a nonprofit organization or government agency, those sales are typically exempt as well, though you need proof of their status.
If you are unsure whether a sale is taxable, the Division of Taxation publishes a list of exempt items and situations on their website. You can also call their customer service line to ask about a specific transaction before you complete the sale.
Frequently Asked Questions
Can I pay my sales tax by credit card?
Yes, you can pay online through the Division of Taxation portal using a credit or debit card. The state charges a convenience fee of about 2.5% to 3% for card payments, so a $1,000 payment costs you an extra $25 to $30. Bank transfer and check payments do not have this fee.
What if I did not collect enough tax from my customers?
You still owe the full amount of tax due based on your sales, even if you did not collect it from customers. This is your responsibility as the permit holder. If you undercharged customers, you cannot go back and ask them for more money—you absorb the difference. This is why it is important to set your prices correctly from the start.
Do I have to pay sales tax on items I buy for my business?
Yes, you pay sales tax on business purchases just like any other customer, unless the item is exempt. However, if you buy materials that become part of a product you sell, you may be able to deduct that tax as a business expense. Talk to an accountant about what you can deduct.
What if my business is seasonal and I only sell during part of the year?
You still file returns for every period, even if you had no sales. If you had no sales, you file a return showing zero and owe no tax. You must keep filing on schedule. If you want to change your filing frequency or go inactive, contact the Division of Taxation to request a change in status.
Can I set up automatic payments so I do not have to remember the due date?
Yes, if you set up electronic funds transfer (EFT), the Division of Taxation withdraws the payment automatically from your bank account on the due date. This ensures you never pay late and you get the 5% early-payment discount if you arrange it for the 10th instead of the 20th.