ncCPAp on the GO!

NJ sales tax for NY based business

  • 1.  NJ sales tax for NY based business

    Posted 06-26-2019 13:46
    Good afternoon,

    A client with a Single Member LLC based in NYS (Long Island), who does industrial machinery installation and repairs, has rec'd calls to do service work in New Jersey.  I spoke to the NJ sales tax dept., they said he does have to charge and pay NJ sales tax.  I then spoke to someone who owns a similar company, he said his accountant researched it a while ago and said that 'as long as you do not have a regular person who works out of NJ or a location in NJ, you do not have to register with NJ nor pay sales tax.'

    Any advise as to whether this company is required to charge and pay sales tax in New Jersey?

    Thank you in advance,


    Conchita (Connie) Machado. EA, CAA
    Complete Multi Services 1 LLC
    770 Sycamore Ave.
    Bohemia, NY 11716
    P. 631-750-3061

  • 2.  RE: NJ sales tax for NY based business

    Bronze Most Valuable Member
    Posted 06-27-2019 12:27

    Performing services in New Jersey, and probable every state creates sales tax nexus and possibly income tax nexus also, requiring the seller (service provider) to collect and remit sales tax.
    The question is, how many times does a person have to enter a state to be considered to have nexus?  The NJ sales tax law does not specify the number of occasions to create nexus.  That may imply only one occasion.  Some states may be a few. For income tax nexus it would require performing services on a regular basis. You didn't indicate how often your client provides a service in NJ.  The advisor that you mentioned may have been considering the audit risk.  What sometimes happens, is during a sales tax audit of a taxpayer in NJ, the auditor comes across an invoice with no sales tax.  That could be your client's invoice.  That could lead to an audit of your client.

    New Jersey Sales Tax Law:

    54:32B-2  Definitions.  

    (1)   The term "seller" includes:
       (A)   A person making sales, leases or rentals of tangible personal property, specified digital products or services , the receipts from which are taxed by this act;

    I'm assuming that the service that your client provides would be a taxable service, otherwise you would not have asked your question.

    Brian Gordon
    State Tax Audit Representation, Inc.

    Brian Gordon CPA
    State Tax Audit Representation
    626 RXR Plaza
    Uniondale, NY 11556