Use tax is imposed on items that are purchased for use in New Jersey for which you did not pay sales tax or you pay less sales tax than what is imposed by New Jersey. Examples of purchases where sales tax may not be collected are those made via the internet, mail order catalog or out-of-state. Generally, online purchases made from out of state sources are the most common reason for applying Use Tax.
What is the Use Tax rate?
The New Jersey sales and use tax rate is currently 6.625%.
- No Sales Tax Paid - If no sales tax was paid on an item or service, you would need to calculate the tax using the 6.625% rate for New Jersey. Include the cost of shipping in the tax calculations.
- Sales Tax Paid less than 6.625% - If you purchased an item out of state and you paid sales tax less than the 6.625% rate in New Jersey, you must calculate the difference in sales tax and report the difference on your return.
- If sales tax in the other state is more than the New Jersey rate, no credit is issued for the sales tax paid.
New Jersey use tax may be entered into the program, by following this path:
- State Section
- New Jersey Return
- Use Tax Due on Out-of-State Purchases