Personal Income Tax |Homestead Benefit | Business Registration | Sales and Use Tax | Other |Motor Vehicle Casual Sales l Bulk Sales
Personal Income Tax
Have the New Jersey gross income tax rates changed this year?
No, the New Jersey gross income tax rates for 2012 remain the same as the rates that were in effect for 2010.
For further information view
How do I check the status of my New Jersey income tax refund?
- New Jersey tax table and tax rate schedules used to calculate the amount of income tax due on returns for tax year 2012.
- New Jersey withholding tables.
You can get information on the status of your New Jersey income tax refund either online or by phone.
- Online Inquiry
- Phone Inquiry: 1-800-323-4400 (toll-free within NJ, NY, PA, DE, and MD) or
609-826-4400 (anywhere) This service is available 7 days a week (hours may vary). You will need the social security number that was listed first on your return and the amount of the refund requested when you call.
The automated systems can tell you if and when your refund was mailed or the date it was deposited into the bank account you designated when filing. (Direct deposit is only available on resident income tax returns filed electronically or filed on forms that were prepared and printed using approved tax software). The systems also allow you to begin the procedure to trace a lost refund check.
If you filed a paper return, information on the status of your refund will not be available for a minimum of 12 weeks from the time the return was mailed. Paper returns are not logged in as they are received. Division of Taxation personnel cannot verify receipt of your return until processing has begun, and the return appears in our computer system.
You can also perform an online search to determine if your refund check was returned to the Division of Taxation by the U.S. Postal Service because of an invalid mailing address. If you discover that your check was returned, you can submit a claim form online to have it reissued.
If you do not have access to a Touch-tone phone, or if you need information about the status of a prior-year refund, call the Customer Service Center at 609-292-6400 during normal business hours to speak to a Division of Taxation representative.
How do I know if my New Jersey tax return was received?
Electronic Returns: If you used NJ WebFile to file online, you will receive a confirmation number at the end of your filing that serves as proof that your return was successfully filed. Note: Your return is not filed until you receive your NJ WebFile confirmation number. If you filed your return using approved commercial software such as TurboTax, the software company will notify you about the receipt of your return. If you had a tax practitioner file your return electronically, the practitioner should notify you as to whether your return was accepted for filing.
Paper Returns: Paper returns and payments are not logged in as they are received. Division of Taxation personnel cannot verify receipt of your return until processing has begun, and the return or payment appears in our computer system.
I received only one “State” copy of my W-2, and I have more than one state return to file. What should I do?
New Jersey will accept a photocopy of your W-2 form(s), provided that the copy is legible.
I used one of the “paperless” filing methods. Must I now send you my W-2 form(s)?
When you file your return electronically it is not necessary to submit paper copies of any supporting documents unless you are specifically requested to do so by the Division of Taxation. This includes your W-2s, 1099s, tax statements, or documents that establish the income, exemption(s), or deduction(s) you reported on your return. However, you should retain these documents for your records, as you may be asked to submit them at a later date. And, if you file an amended return, you must submit all supporting schedules, forms, or documents you would have enclosed if you had filed your original return on paper.
I filed my return using commercial software, and I have questions. Who can help?
The New Jersey Division of Revenue’s Alternative Filing Branch is responsible for returns that are electronically filed using commercial software such as TurboTax. For answers to questions concerning the e-file program, including questions on document control numbers (DCNs), contact the Division of Revenue's E-File Hotline at 609-292-9292.
I lived in New Jersey for only part of the year. Which return do I file, resident or nonresident?
Any person who became a resident of New Jersey or moved out of the State during the year and whose income from all sources for the entire year is greater than $20,000 ($10,000 if filing status is single or married/CU partner, filing separate return) must file a New Jersey resident income tax return (Form NJ-1040) and report that portion of their income received while a resident of New Jersey. A part-year resident who received income from New Jersey sources while a nonresident of this State must also file a New Jersey nonresident return (Form NJ-1040NR) if their income from all sources for the entire year exceeds the filing threshold above. Part-year residents (and part-year nonresidents) must prorate all income, exemptions, deductions, and credits, as well as the pension and other retirement income exclusions, if applicable, to reflect the period covered by the return. View additional information on filing a part-year return.
Are Social Security benefits taxable for New Jersey gross income tax purposes?
No. Federal Social Security benefits are not subject to New Jersey income tax and should not be included on the New Jersey return. Likewise, Social Security should not be reported on the property tax credit application, Form NJ-1040-H.
Are unemployment, disability payments, or family leave insurance taxable for New Jersey gross income tax purposes?
Unemployment compensation is not subject to New Jersey gross income tax and should not be included on the New Jersey gross income tax return. Likewise, temporary disability (including family leave insurance benefits) received from the State of New Jersey or as third party sick pay is not subject to New Jersey gross income tax and should not be included on the New Jersey gross income tax return.
Is the Federal deduction for general sales taxes paid applicable for New Jersey income tax purposes?
New Jersey law provides no deduction from income for sales taxes paid.
On the Federal return I am claiming a deduction for amounts paid for health insurance for my child who was age 26 at the end of 2012. Can I claim this deduction on my New Jersey income tax return?
For Federal purposes you may be able to deduct amounts paid for health insurance for any child of yours who was under age 27 at the end of 2012. However, for New Jersey purposes you may deduct such amounts as medical expenses only if the child was your dependent. For more information see Division Technical Advisory Memorandum TAM-14.
Are property tax relief benefits such as the homestead benefit or property tax reimbursement (Senior Freeze) taxable?
For New Jersey gross income tax purposes the homestead benefit and property tax reimbursement (Senior Freeze) payments are not taxable, and should not be reported on the New Jersey gross income tax return.
Information on the Federal income tax treatment of these payments, called "recoveries" by the IRS, can be found in the Federal Form 1040 instructions and IRS Publication 525, Taxable and Nontaxable Income, which are available on the IRS Web site.
I made a mistake when I filed my New Jersey return. How do I correct it?
To amend your New Jersey resident income tax return (paper return or return that was filed electronically using NJ WebFile, approved vendor software, or online tax preparation Web site), file Form NJ-1040X for the appropriate year. You must file a paper Form NJ-1040X whether your original return was filed electronically or on paper.
New Jersey does not have a special form for amending nonresident returns. To amend a nonresident return, you must file a paper Form NJ-1040NR for the appropriate year. Write the word "Amended" in bold letters in the upper right hand corner of the return.
What are the mailing addresses for the gross income tax returns?
The address to which you mail your New Jersey return and/or payment depends on the form you are filing, and whether you are due a refund or making a payment. View the list of mailing addresses.
Why did (didn’t) I receive a Form 1099 from New Jersey?
Forms 1099-G and 1099-INT are reports of income you received from the Division of Taxation during the tax year. The IRS requires government agencies to report certain payments made during the year, because those payments are considered taxable income for the recipients. The Division of Taxation must report any refund or overpayment credit amount issued during the tax year to individuals who claimed itemized deductions on their income tax returns for the year. We must also report any interest paid on refunds. The IRS requires that refund and interest amounts be reported on two separate forms: Form 1099-G and Form 1099-INT. The State of New Jersey does not mail Form 1099-G, Certain Government Payments, to report the amount of a State tax refund a taxpayer received. State income tax refunds may be taxable income for Federal purposes for individuals who itemized their deductions on their Federal tax return in the previous year. Taxpayers who need this information to complete their Federal return can view or print their 1099-G information online. For more information see Frequently Asked Questions Form 1099-G and Form 1099-INT
Note: Form 1099-G statements for unemployment insurance benefits are not issued by the Division of Taxation, but by the Division of Unemployment Insurance within the Department of Labor and Workforce Development. For more information, visit their Web site.
How can I obtain New Jersey tax forms?
New Jersey gross income tax forms are available on our Web site.
Forms are available by fax:
Call 609-826-4500 from your fax machine’s phone. View a list of available forms.
How do I obtain a copy of a New Jersey income tax return that I filed?
You can obtain a copy of a previously filed New Jersey income tax return by completing Form DCC-1. There is a fee of $1.00 per side of the return. Mail the completed form, with payment, to: New Jersey Division of Taxation, Document Control Center, P.O. Box 269, Trenton, NJ 08695-0269.
Copies of previously filed New Jersey income tax returns (Form NJ-1040, NJ-1040NR, or NJ-1041) may also be obtained by delivering a completed Form DCC-1 with the appropriate payment to a Division of Taxation Regional Office. Regional Offices can provide copies of previously filed New Jersey income tax returns only to the person(s) who signed the requested tax return or to the authorized representative of the taxpayer(s) who provides a Form M-5008-R, Appointment of Taxpayer Representative, that covers the return(s) being requested. A photo ID of the taxpayer (or the taxpayer’s authorized representative) is required.
Payment for copies of tax returns can only be made by check or money order; payment cannot
be made in cash or by credit card.
How do I get a replacement for an old (stale-dated) check or a check that was lost, stolen, or destroyed?
Old (stale-dated) Checks.
If you have the old (stale-dated) check in your possession, return the original check to the New Jersey Division of Taxation with a letter requesting a replacement check to the address below. Be sure to keep a photocopy of the check for your records.
NJ Division of Taxation
Taxpayer Accounting Branch
PO Box 266
Trenton NJ 08695-0266
Lost, Stolen, or Destroyed Checks.
If you do not receive your check within 30 days of the date the check was issued, or if you received a check that was subsequently lost, stolen, or destroyed, you can request a replacement check. Call the Customer Service Center at 609-292-6400 and speak to a Division Representative from 8:30 a.m. to 4:30 p.m., Monday through Friday (except holidays). The Division will file a check tracer on your behalf.
Due to the volume of claims, please allow up to 30 days for a replacement check to be issued.
You can also request a check tracer for your New Jersey income tax refund check for the current year by calling the Division’s Automated Refund Inquiry System at 1-800-323-4400 (Touch-tone phones within NJ, NY, PA, DE and MD) or 609-826-4400 (Touch-tone phones anywhere).
I live in New Jersey but work in Pennsylvania. My employer withheld Pennsylvania income tax from my wages. What do I do?
As a result of the Reciprocal Personal Income Tax Agreement between the State of New Jersey and the Commonwealth of Pennsylvania, New Jersey residents who receive compensation from Pennsylvania sources are not subject to Pennsylvania income tax on those earnings. If you are a New Jersey resident and Pennsylvania income tax was withheld from wages you earned there, you must file a Pennsylvania return to obtain a refund. To stop the withholding of Pennsylvania income tax, complete Form REV-419, Employee’s Nonwithholding Application Certificate, and give it to your employer. More information is available on the Pennsylvania Department of Revenue Web site or by calling 1-717-787-8210.
In addition, if New Jersey income tax was not withheld, you must pay the amount due to New Jersey and may be required to make estimated tax payments.
More information about the Reciprocal Personal Income Tax Agreement between New Jersey and Pennsylvania.
What is the mailing schedule for the homestead benefit applications? My neighbor received one but I did not.
Homeowner Benefit Applications were mailed to homeowners beginning in early October 2013. The deadline for filing these applications has been extended to December 31, 2013. The original filing deadline was November 22, 2013. An email with the instructions for downloading the application was sent on the same delivery schedule to those filers who requested electronic applications.
||Delivery Expected to Begin
|Camden, Hudson, Hunterdon, Salem, Somerset
||Thursday, October 10
|Bergen, Burlington, Cumberland, Warren
||Saturday, October 12
||Tuesday, October 15
|Atlantic, Essex, Monmouth, Sussex
||Friday, October 18
|Cape May, Union
||Saturday, October 19
|Gloucester, Mercer, Middlesex, Passaic
||Tuesday, October 22
If you did not receive your application, call the Homestead Benefit Hotline (1-888-238-1233) or visit a Regional Office for assistance.
Note: Applications are not being sent to homeowners whose 2012 New Jersey gross income was over the income limits established in previous State Budgets.
Where do I get an Identification Number and PIN so I can file my Homestead Benefit application?
If you received a green application packet in the mail, you will find your ID and PIN printed on the Homestead Benefit Worksheet in the center of the packet. If you asked to receive your application electronically, use the link in the email message you got from the Division of Taxation to obtain your ID and PIN.
If you have not received an application packet or an email message from the Division, call the Homestead Benefit Hotline (1‑888‑238‑1233) or visit a Regional Office for assistance.
Am I eligible for the current year (2012) homestead benefit?
You are eligible if you were a New Jersey resident who owned and occupied a home in New Jersey that was your principal residence on October 1, 2012, provided the 2012 property taxes were paid and you meet certain income limits. For 2011, the income limit was $150,000 for homeowners age 65 or older or blind or disabled; for homeowners under age 65 and not blind or disabled, the income limit was $75,000. The State Budget, which must be adopted by July 1, 2014, may change the 2012 amounts. You can file an application regardless of your 2012 New Jersey gross income. However, if your income exceeds the limits determined by the State Budget, your application will be denied.
As long as one of you is over 65 or disabled you would be able to go by the eligibility requirements for over 65 or disabled regardless of the age or disability status of the other.
My husband and I file our homestead benefit jointly, he is over 65 and I am under. Do we go by the eligibility requirements for over 65 because he is over 65 or the requirements for under 65 because I am under 65?
Since you and your husband are filing jointly, as long as one of you is 65 or older (or blind or disabled), you meet the eligibility requirements for age 65 or older or blind or disabled.
My spouse and I file our homestead benefit using filing status 3, Married/CU Partner, filing separately. We each maintain a separate residence. My spouse is disabled and I am not. What eligibility guidelines should I follow? What if we file using filing status 6, Married/CU partner, filing separate, both maintaining the same residence?
When filing using filing status 3 and maintaining separate residences, you would each file a separate application. Only the individual who is age 65 or older or blind or disabled should answer “Yes” to the age and/or disability question on the application.
If your filing status is 6, Married/CU partner, filing separate, both maintaining the same residence, you would file one application with your spouse. As long as one of you is 65 or older (or blind or disabled), you meet the eligibility requirements for age 65 or older or blind or disabled.
How can I file my homestead benefit application?
Most homeowners will file their applications either online or by phone. Both filing systems are available 24 hours a day, 7 days a week during the filing period.
My mailing address changed. How can I update this information?
- By phone at 1-877-658-2972
You will have the option to change your mailing address when you file your homeowner benefit application online or by phone, just follow the prompts.
If you have already filed your application, please call us to request a change of address at 609-292-6400, write us at New Jersey Division of Taxation, PO Box 900, Trenton, NJ 08646-0900 or visit one of our Regional Information Centers. A list of Regional Information Centers can be found here
I need a paper application. How can I obtain one?
You can request one from the online or phone systems listed below:
How will I know if I am getting a credit from my 2012 homestead benefit and how much it will be?
- Online Filing System. Once you enter your Identification Number and PIN, you can request that a paper application be sent to you by mail. Or, you can view and print a copy of the paper application immediately.
- Phone Filing System (1-877-658-2972). After you enter your Identification Number and PIN, you can indicate that the name preprinted on your application is incorrect. Once you do that, a paper application will be mailed to you. You will also have an opportunity to update your mailing address if necessary.
- Homestead Benefit Hotline. Call 1-888-238-1233 (8:30 a.m. to 5:30 p.m., Monday through Friday, except holidays), to request a paper application.
Most homeowners will receive their benefit as a credit on a future property tax bill. Your tax collector will issue a property tax bill or advice copy reflecting the amount. However, benefit amounts will not be finalized until the completion of the State Budget, which must be adopted by July 1, 2014. More information on the benefit payment is available here
My spouse and I each earned income that is below the income limit, but our combined income is higher than the limit. Do we qualify? We maintain the same principal residence.
No. The income limits apply to a single individual, a married/civil union couple living in the same residence, and a married/civil union partner maintaining a residence separate from their spouse/civil union partner. For 2011, the income limit was $150,000 for homeowners age 65 or older or blind or disabled; for homeowners under age 65 and not blind or disabled, the income limit was $75,000. The State Budget, which must be adopted by July 1, 2014, may change the 2012 amounts.
You can file an application regardless of the amount of your 2012 New Jersey gross income. However, if your income exceeds the limits determined by the State Budget, your application will be denied.
I received a current year (2012) Homestead Benefit Application Packet for a vacation home that I own at the New Jersey shore. Am I eligible for a homestead benefit?
No. You are not eligible for a homestead benefit and you should not file an application. One of the eligibility requirements is that you must occupy the property as your principal residence on October 1, 2012. A principal residence is the home which you actually and continually occupy as your permanent residence. No benefit will be granted for your vacation home, your “second” home, or a property which you own and rent to someone else.
I own a condo. How do I answer the question on my benefit application “Does the property have more than one unit”?
Residents of condominiums are not considered to be living in multiple-unit dwellings and should answer “No” to this question.
My sister and I own a house together. How do we apply for the current year (2012) homestead benefit?
If you owned your principal residence with someone other than your spouse/civil union partner and you meet the eligibility requirements, your homestead benefit will be based on your percentage of ownership in the property, even if your co-owner(s) are not eligible for the benefit.
If both you and your sister owned and occupied the house as your principal residence on October 1, 2012, and meet the other eligibility requirements, you must each file a separate benefit application. (A co-owner(s) who did not occupy the property as their principal residence on October 1, 2012, is not eligible for the benefit.) If you received a Homestead Benefit Application Packet that has the percentage of the property you owned preprinted on Line 3b, you can file your application online or by phone. If there is no percentage of ownership printed on the application, a paper application must be filed.
My fiancé and I shared ownership of our home on October 1, 2012. We married prior to January 1, 2013. How should we apply for our current year (2012) homestead benefit?
You should file a 2012 homestead benefit application in both of your names and report 100% ownership of your home. You should indicate the same filing status as reported on your 2012 State income tax return(s).
I received my current year (2012) homestead benefit application and it lists my name and the name of my former spouse. How should I apply for my 2012 homestead benefit?
If you divorced prior to October 1, 2012, you should file a 2012 homestead benefit paper application in your name only and report your appropriate percentage of ownership (50% unless otherwise specified on the property deed or the divorce decree). If you divorced on or after October 1, 2012, but prior to January 1, 2013, and you lived in the home by yourself on October 1, 2012, you should file a 2012 homestead benefit paper application in your name only and report 100% ownership. If you and your former spouse resided in the property on October 1, 2012, you should file separate paper applications, each reporting your appropriate percentage of ownership (50% unless otherwise specified on the property deed or the divorce decree). In each case, the homeowner(s) should indicate the same filing status as reported on their 2012 State income tax return(s).
I married during 2012, but was the sole owner of my home on October 1, 2012. What income do I report on my current year (2012) homestead benefit application?
If you and your spouse lived together in your home on October 1, 2012, you must report combined income on your homestead benefit application. If your spouse maintained a separate principal residence on October 1, 2012, you should report only your income on the application.
I owned a home in New Jersey on October 1, 2012, but have since sold it and moved. How will I get my 2012 benefit?
Most homeowners will receive their 2012 homestead benefit as a credit on a future property tax bill. However, if you sold your home prior to filing your homestead benefit application (or you plan to close on the sale before November 22, 2013), answer “No” to the question “Do you still own the property for which you are filing this application?” when you file your homestead benefit application. In this case, any homestead benefit for which you are eligible will be issued in the form of a check (or direct deposit if you prefer). See Homestead Benefit Information for Homeowners Who Sold or Plan to Sell Their Homes for more information.
I live in a co-op and do not receive a property tax bill from my municipality. How will I get my 2012 benefit?
If your principal residence was a unit in a co-op or continuing care retirement community, any homestead benefit for which you are eligible will be issued in the form of a check (or direct deposit if you prefer).
I am delinquent in paying my property taxes. May I still file for a Homestead Benefit?
Should I mail my current year (2012) Homestead Benefit Worksheet and/or confirmation number to the Division of Taxation?
No. If you received a confirmation number, your application was successfully filed. Please do NOT mail your Homestead Benefit Worksheet to the Division of Taxation. Keep a copy for your records.
My 2011 homestead benefit was applied to my 2013 property taxes. Since my property taxes are paid by my mortgage company, how will this affect the amount of my mortgage payments?
Your mortgage payments will likely not change as a result of your homestead credit until your mortgage company conducts your annual escrow account analysis. Please contact your mortgagor with additional questions.
Can I check the status (amount) of my homestead benefit?
You can get information on the status (amount) of your homestead benefit either online or by phone.
How do I register for a New Jersey tax identification number? How do I register a business?
A business must complete and file Form NJ-REG (Business Registration Application) to register with the State to collect/remit New Jersey taxes such as sales tax or employee withholdings, and to obtain a New Jersey tax identification number. You can register a business online or file a paper application. For additional information on registering your business visit the Division of Revenue Web site.
I have a business in another state and am coming to New Jersey for a trade/craft show. Do I have to register?
Anyone who makes retail sales in this State, including sales at flea markets, craft shows, or trade shows, is doing business in New Jersey and must comply with the State’s tax laws. New Jersey law requires all vendors, even seasonal businesses and “one-time” vendors, to register with the State for tax purposes at least 15 business days before starting business, and to collect New Jersey sales tax on all sales of taxable tangible personal property or services. There are no special provisions for temporary vendors. Once registered, you must file all required returns until you properly end your tax registration with New Jersey.
File Form NJ-REG (Business Registration Application) to register with the State to collect/remit New Jersey taxes such as sales tax or employee withholdings, and to obtain a New Jersey tax identification number. You can register online or file a paper application. For additional information on registering your business visit the Division of Revenue Web site.
Also see publications ANJ-11, Arts & Crafts Businesses and New Jersey Sales Tax, ANJ-15, Flea Markets & New Jersey Sales Tax, and ANJ-13, Ending Your Tax Registration in New Jersey, available at the Division's Sales and Use Tax Publication page.
How do I add (end) a specific tax eligibility once my business is registered?
You can add or end eligibility for specific taxes either online or by filing a paper Form REG-C-L, Request for Change of Registration Information. Visit the Division of Revenue's site for more information.
The procedures to be followed to end your business depend upon the type of business entity you have (sole proprietorship, partnership, corporation, etc.) and the taxes for which you are registered. For details, please see publication ANJ-13, Ending Your Tax Registration in New Jersey.
New Jersey’s procedures for corporate dissolution require that all documents for dissolution or withdrawal, including the request for the tax clearance, be submitted together as a package to the Division of Revenue. For additional information, including the necessary forms and instructions, go to the Division of Revenue’s Web site
How can a business change its address?
You can change the address for a business account either online or by filing a paper Form REG-C-L, Request for Change of Registration Information. Change an address online or to obtain a copy of Form REG-C-L
Sales and Use Tax
Why can’t I submit Form ST-51 showing $0.00 due?
Because the ST-51 is not required to be filed for periods in which less than $500 is due, there is no provision for the online filing of a “zero” monthly return. While the quarterly return (Form ST-50) must be filed regardless of the amount due, the monthly sales tax return (Form ST-51) must only be filed for each month in which the amount of tax due exceeds $500. When the amount due for any period covered by Form ST-51 is $500 or less, payment for that month may be remitted with the next quarterly return (Form ST-50). Visit the Division's Web site for additional information
When I try to file online and make my quarterly sales tax payment by e-check, the system will not let me enter today’s date as the settlement date. Today is the due date. What should I do so that my payment is not late?
When you file online or by phone and make your payment by electronic check (e-check), the earliest settlement date (date the payment will be debited from your account) you can select is the next business day. No matter which payment method you select, if your payment transaction is initiated by 11:59 p.m. on the due date, your payment will be considered timely even if the settlement date is after the due date.
What is the New Jersey sales tax rate?
The State of New Jersey’s sales and use tax rate is seven percent (7%). However, there are exceptions to this statewide rate. In Urban Enterprise Zones, UEZ-impacted business districts, and in Salem County, sales tax may be charged at 3.5% (50% of the regular rate) on certain items. In addition, local sales taxes are imposed on sales of certain items sold in Atlantic City and Cape May County. For additional information, see Tax Topic Bulletin S&U-4, New Jersey Sales Tax Guide
View a sales tax collection schedule (ST-75
) for the Statewide 7% sales and use tax.
Are shipping and handling subject to sales tax?
Effective October 1, 2005, the law provides for a new definition of "delivery charges." For transactions occurring on or after October 1, 2005, handling charges are included within the definition of delivery charges, and are therefore exempt from tax whether or not they are separately stated to the purchaser.
Prior to October 1, 2005, a separately stated charge for the transportation (shipping) of tangible personal property from the vendor to the customer was not subject to New Jersey sales tax. Depending on the circumstances, a separately stated “handling” charge could be considered part of the taxable receipt (amount on which sales tax is due) because it occurs prior to actual shipment. However, when “shipping and handling” charges were billed together, both amounts were considered exempt transportation charges for New Jersey sales tax purposes.
As of October 1, 2006,
the exemption for delivery charges imposed by the seller is repealed for taxable goods and services. For deliveries on and after October 1, 2006, if a shipment includes both taxable and exempt property, the seller should allocate the delivery charge based on either the total sales price or the total weight, and collect tax on the portion of the delivery charge allocated to the taxable goods. In such mixed transactions, if the seller does not allocate the delivery charge, the entire delivery charge is taxable.
Why can't I submit ACH Credit payments when I submit the tax return on your Web site?
There is no provision for ACH Credit payers to initiate the payment through the online filing system. Only ACH Debit registrants can complete the EFT transaction online. If you are registered for ACH Credit, please use your regular EFT method of payment (outside the online filing system) to initiate your payment transaction
I recently switched banks. How do I update my bank account information for making ACH debit payments?
ACH debit customers can update their bank account information as follows:
- Online. Log on using your New Jersey ID Number and the PIN you received when you enrolled in the EFT program and then choose “Maintain Enrollments.” Your account information will be updated immediately.
- Fax or mail a completed Revision Request for Automated Clearing House (ACH) Debit Account Payments, which is available on the Division of Revenue’s Web site. Allow 15-20 business days from the beginning date for the new account for the revision request to be to be processed.
If the due date for your payment is imminent, you may need to select another payment method until your bank information is updated. View information on electronic payment options.
I need my PIN to file my business tax return. How can I get my PIN?
To use the online filing and payment services for business taxes, you must enter your 12-digit Federal or New Jersey Taxpayer Identification Number and either the first four characters (letters or numbers) of your registered business name or the 4-digit Personal Identification Number (PIN) assigned to the business. However, if you login using the business name, you will not be able to view any returns or payments previously submitted or to select the Electronic Funds Transfer (EFT) payment option. A PIN is required for full access to all options.
If you need to obtain your PIN, you can submit a request to have it sent to you by e-mail. Request PIN.
For immediate assistance with filing your return or making a payment, call the Division of Taxation’s Customer Service Center at 609-292-6400 from 8:30 a.m. to 4:30 p.m., Monday through Friday, or visit one of the Taxation Regional Offices.
Motor Vehicle Casual Sales Notices
What does N.A.D.A. stand for?
National Automobile Dealers Association.
Why did I receive this notice? I already gave the information to the Division of Motor Vehicles.
By law, the Director of the NJ Division of Taxation must certify that the correct amount of sales tax has been paid on the actual purchase price of the vehicle. If a sales tax exemption was claimed, the Director must certify that no sales tax was due.
What will happen if I do not respond to the notice?
Failure to respond to the notice may cause an assessment of tax due followed by collection action.
Will I be notified that the documents I mailed were sufficient and no further sales tax is due?
If the Division determines additional documentation is necessary to complete a review of the account, a follow-up notice will be mailed to you. If the documentation is complete a closed inquiry letter will be issued if necessary.
Do I have to complete the Buyer’s Certification at the bottom of the Questionnaire?
Yes. When completing the Questionnaire, it is required that the Buyer’s Certification be completed.
How do I check the status of the paperwork I mailed in response to the notice?
To check on the status of paperwork previously submitted, contact the Division of Taxation Casual Sales Unit at 609-984-6206 or by email at Casual.Sales@treas.state.nj.us.
Please Note: Emails sent to the above-referenced address are not secure. No confidential information, such as Social Security or Federal Tax Identification numbers, dates of birth or bank account numbers should be included in your email. Please make sure that this information is not included in any attachments you provide.
Why have I received a second notice?
A Second Notice is sent when no response is received from the first inquiry.
If you have received a second notice for the same transaction, and you previously sent in correspondence, contact the Division of Taxation Casual Sales Unit at 609-984-6206 or by email at Casual.Sales@treas.state.nj.us
Please Note: Emails sent to the above-referenced address are not secure. No confidential information, such as Social Security or Federal Tax Identification numbers, dates of birth or bank account numbers should be included in your email. Please make sure that this information is not included in any attachments you provide.
The vehicle was a gift. How do I show proof of that?
If the vehicle was free and clear
of any lien, check the appropriate Verification of Exemption
box on the Questionnaire and have the donor complete the Seller’s Affidavit
If the vehicle was transferred with a lien, were you a co-owner on the original loan agreement or Title?
If you were a co-owner on the original loan agreement or Title, there is no tax due. Check the appropriate Verification of Exemption box on the Questionnaire and submit a copy of the original loan agreement or Title.
If you were not a co-owner on the original loan agreement or Title, tax is due on the principal loan amount assumed.
Example : You transferred the vehicle and assumed a $5,000 loan amount that was still remaining. You must pay 7% sales tax on the $5,000. Total sales tax due = $350. You must remit the sales tax due along with a copy of the Transfer of Equity paperwork to document the loan amount you assumed.
If you have questions pertaining to GIFT TAX
, contact the IRS at 1-800-829-1040. This is a federal tax.
The vehicle was a gift however the donor is now deceased. What documentation should I submit?
You should check the appropriate Verification of Exemption
box on the Questionnaire. The executor(trix) should complete the Affidavit on behalf of the deceased donor and provide a copy of their surrogate certificate and the donor’s death certificate.
This vehicle was left to me in a will. What do I need to send in?
You should check the appropriate Verification of Exemption box and enclose a copy of the will.
The vehicle was in poor condition when I bought it. How do I prove that?
You may submit copies of major repair bills, estimates for repairs, accident reports, photographs or you may have the seller complete the Affidavit in Section III of the Questionnaire.
The vehicle was in poor condition and I made the repairs myself.
What type of documentation can I submit?
If you are unable to contact the seller to complete the Affidavit, you should prepare a statement indicating the purchase price and condition of the vehicle. You should also indicate what repairs you made and why there are no receipts for the repairs. You can include receipts for parts you may have purchased as well as photographs you may have of the vehicle before and after the repairs.
I did not report the correct purchase price when I registered the vehicle, however, I paid less than the N.A.D.A. value listed on the notice. What should I do?
You should have the seller complete the Affidavit. If the seller is not available, you should submit a letter stating the correct purchase price and provide any information that will verify the purchase price. Your information will be reviewed and if acceptable, a Notice of Adjustment will be sent for the additional tax due.
I paid cash for the vehicle and do not have a receipt. How can I prove the purchase price?
If you can produce a bank statement that documents the withdrawal, you can attach a copy to your correspondence. Your information will be reviewed. However, without proper proof of the vehicle purchase price, you may be assessed sales tax based on the N.A.D.A. value.
I cannot locate the seller to have them fill out the Affidavit. What should I do?
You should enclose a copy of the cash receipt, cancelled check or money order. You should provide a detailed letter regarding the transaction and provide the seller’s name and contact information, if available. Your information will be reviewed. However, if you cannot provide acceptable proof of the vehicle purchase price, you may be assessed sales tax based on the N.A.D.A. value.
Can I fax the completed Questionnaire and/or the seller’s Affidavit to the Division?
Yes. The fax number is (609) 292-9266.
I am a sole proprietor and I transferred this vehicle from my name to my business name. Is tax due on that transfer?
As a sole proprietor you would not have to pay any additional tax on that transfer. Complete the Questionnaire and attach supporting documentation of the transfer.
The vehicle was purchased from a leasing company at the end of the lease period. What documents should I submit?
You should submit a copy of the lease purchase agreement which indicates the buyout figure and the amount of tax paid by the lessee.
I swapped vehicles with my friend. Is this taxable?
Yes. Swapping vehicles between two private parties is taxable. The tax is based on the Fair Market Value of the vehicle. Trading anything of value for a car is taxable.
Example #1: A person swaps a $5,000 boat for a 1991 Ford Escort. This is a taxable transfer. The tax is based on the Fair Market Value of the Ford Escort, which is the same value as the boat ($5,000 x 7% = $350 sales tax due).
I transferred the vehicle from my corporation to myself. Is this taxable?
Example #2: A person swaps a 1990 Ford Escort for a 1991 Ford Probe. In order to obtain the 1991 Ford Probe, the taxpayer gave $1,000 cash in addition to the 1990 Ford Escort. Tax is based on the Fair Market Value of the 1990 Ford Escort and the $1,000 cash.
Yes, unless the corporation was dissolved prior to the transfer and the vehicle was transferred to a stockholder as a liquidating dividend. If that is the case, submit a copy of the tax clearance certificate.
How can I obtain proof of sales tax paid to the dealer when the vehicle was purchased?
This information can be found on the documents you received from the dealer when you purchased the vehicle. If you are unable to locate these documents, you may complete a Title Search (Form DO-22A) with the Motor Vehicle Commission. There is a $15 fee for this search which will provide you with proof of sales tax paid along with other information regarding the vehicle. You can request Form DO-22A by calling 1-888-486-3339 (within New Jersey) or 1-609-292-6500 (out of State).
Bulk Sale; Law and Procedures for the Filing of the C-9600 Form
1. Q. What is the bulk sale law?
A. In 2007, the bulk sale law was enacted by P.L. 2007, c. 100, sec. 5 (codified as N.J.S.A. 54:50-38). It applies to transactions involving the sale, transfer or assignment in bulk of business assets of any part or the whole of the person's business assets, other than in the ordinary course of business.
2. Q. What are the potential tax liabilities that the Division examines where a title owner is selling, transferring or assigning in bulk, business assets, in whole or in part, including rental or investment real estate?
A. The Division reviews for all state taxes which include deficiencies (i.e. underpayments), delinquencies (i.e. unfiled tax returns), assessments, penalties, interest, fees and costs.
3. Q: Is there a separate tax on a bulk sale transfer?
A: No. New Jersey does not have a separate tax applied to a bulk sale transfer. The tax liabilities of the seller in a bulk sale transfer, however, may be imposed on the purchaser if the purchaser does not comply with the notice and escrow requirements of the law as administered by the Division of Taxation.
4. Q: What is considered "in the ordinary course of business"?
A: It is a term whose exact meaning is determined by the type of business being conducted.
Example 1: A developer buys tracts of land and builds houses to sell. This is what a developer does on a regular a day-to-day basis. If the developer sells a house it built, the transfer is not subject to the bulk sale statute.
Example 2: A pizzeria is selling its existing pizza ovens, some appliances used in its kitchen, tables and chairs and other items it uses in its business. Since the pizzeria's ordinary course of business entails the sale of food and beverages to its clientele and not selling appliances, furniture and other personalty used in the business, the sale of the latter items is not being made in the ordinary course of business. While these items may only be part of the pizzeria's business assets, this "partial" transfer would fall under the bulk sale statute.
Example 3: An individual owns a single family dwelling which she rents out, making her a landlord. Since the landlord is in business to collect rents, the selling of the dwelling constitutes a bulk sale. Even if the property was a multifamily dwelling and the owner resided in one of the units, the transfer of the property will still be considered a bulk sale because the other unit or units was/were rented and it is not in the owner's ordinary course of business to sell rental properties.
5. Q: What is the responsibility of the purchaser/transferee/assignee in a bulk sale transaction?
A: The law says that the purchaser/transferee/assignee (hereinafter in these FAQ's referred to as "purchaser") must "at least 10 days before taking possession of the subject of the sale, transfer or assignment, or paying therefore, notify the director by registered mail, or other such method as the director may prescribe, of the proposed sale and of the price, terms and conditions thereof whether or not the seller, transferor or assignor (hereinafter in these FAQ's referred to as "seller") has represented to, or informed the purchaser, transferee or assignee that the seller, transferrer or assignor owes any State tax and whether or not the purchaser, transferee, or assignee has knowledge that such taxes are owing, and whether any such taxes are in fact owing." The notice is to be provided on form C-9600 which, along with instructions, can be found on the Taxation website.
6. Q. A purchaser timely files the C-9600 notice but before closing, assigns its rights to another party. Must the assignee also file form C-9600, even though none of the terms of the sales agreement have changed, except for the substitution of the new purchaser?
A. No, although the assignee, by taking the place of the original purchaser/transferee, has agreed to take on all of the latter's rights and obligations under the law, including responsibility for holding the amount of escrow in the Division's notice. Also, if the Division is advised whom the actual purchaser/transferee is by way of the assignment, the Division will attempt to amend its escrow notice to advise the assignee of its obligation to hold the escrow. Failure by the Division to send an amended notice, however, does not relieve the assignee of its obligation to the Division.
7. Q: Is there a fee for filing the C-9600 form a bulk sale?
8. Q: What is needed for the notification to the Division to be effective?
A: Again, form C-9600 must be filled out with all applicable information with a date specific of closing. A copy of the executed contract of sale, court order or assignment agreement clearly showing the sales price and all the terms and conditions of the transfer is also required. If the C-9600 form and any required information is inaccurate or not supplied at least 10 days before taking possession, the notice will be considered incomplete and invalid. Any information needed to make the notice complete must be provided in accordance with the above 10 day time period. Should possession occur in less than the 10 day time period, the purchaser will be liable for any State tax liability of the seller.
9. Q. Suppose the seller's FIN on the C-9600 is wrong. Does that make the C-9600 deficient? How can the purchaser correct the C-9600 without the notice being considered untimely if, for example, the Division doesn't get back to the purchaser with the correct FIN at least 10 days before closing?
A. The Division tries to get back to the purchaser or his representative as quickly as possible and usually, the Division will call them to request the proper FIN and advise them that the Division cannot clear a purchaser/transferee without a correct seller's FIN being supplied on the C-9600 form. Obviously, if the seller fails to provide the purchaser with the correct FIN, the Division will take this into account in determining the amount of escrow needed to be held.
10. Q. Is there a way for the purchaser to check online to verify the seller's FIN?
11. Q: Why is a copy of a signed contract of sale, transfer or assignment required by the Division as part of the C-9600 form notice?
A: The signed contract establishes the legal rights and obligations of the parties. It provides the final agreement and commitment of the parties to the transaction reduced to writing. It also not only gives the terms and conditions of the agreement, but also provides, as part of the necessary statutory notice to the Division, the authorization and obligation to release escrow information to the purchaser. Any other writing purporting to provide price, terms and conditions which is not the signed agreement, is not legally binding and can be changed at will by either or both parties.
12. Q: Proper notification was received by the Division two days before the closing on the transfer. Will purchaser be protected from liability?
A: No, the statute requires that notice be sent so that it is received by the Division at least 10 days prior to the closing date which is usually when the purchaser takes possession. Postmarked dates of mailing do not show proof of receipt. Should the closing occur prior to the 10 days elapsing, the purchaser will be held responsible for the tax liability of the seller.
13. Q: Is the 10 days notice requirement for purchasers counted as 10 calendar days or business days? Why?
A: 10 business days (i.e. excluding weekends and holidays). This provides the Division with the time it needs to adequately research and compute the needed amount of escrow to be held.
14. Q: The C-9600 form notice gave a sufficient date of transfer of possession, but the closing was moved back. Does this affect the validity of the notice?
A: No, as long as proper notification was given 10 days prior to the closing, but the bulk sale caseworker assigned to oversee the transfer on the part of the representative, should be advised of the new date.
15. Q. Suppose a purchaser provides the timely C-9600 notice but must close less than 10 days after the Division receives the notice (e.g. where a mortgage commitment will expire and the lender will not agree to extend the expiration date)? Is there some way the Division can prioritize its escrow notice response so buyers in such a situation can receive the notice in less than the 10 days even though the Division is statutorily given 10 days to respond?
A. That issue is between the lender, purchaser and seller. The statute gives the Division 10 days to respond. In a situation where the closing may be desired before the Division's 10 day escrow notice period expires, the purchaser should strive to provide its notice well in advance of the 10 day purchaser's notice to the Division requirement.
16. Q: What are the consequences to the purchaser of not notifying the Division that it purchased an entity engaged in an income producing business?
A: Without proper and timely notification by the purchaser, any State taxes the seller is liable for or potentially owes, are now jointly the purchaser's responsibility, as well. The Division can take steps necessary to satisfy the seller's indebtedness including judgment, levies and seizure of assets of the purchaser.
17. Q: Can the seller file a C-9600 form notice if the purchaser does not want to?
A: The statute stipulates notice must be received from the purchaser. Filing of the notice by the seller does not protect the purchaser in any way. The purchaser will be held responsible should the notice be defective, filed out of time or otherwise invalid.
18. Q. Shouldn't the C-9600 form also be signed by the seller, thereby binding the seller to the information provided in the form as well?
A. The form does not need to be signed by the seller. The object of filing the form in a timely manner is to relieve the purchaser of the seller's state tax liabilities by providing notice to the Division of the sale of business assets. After the filing of the C-9600 form, the seller is requested to file various forms and tax returns with the Division after proper notification has been received by the purchaser. The seller, at that time, can also file any other information with the Division which the seller believes will help the Division accurately determine any state tax liabilities of the seller which figure in the calculation of the amount of escrow required.
19. Q. Can the Div. release confidential tax information to the purchaser if the seller waives its right in the sales contract, a release form or by signing the C-9600 agreeing to the release of the information?
A. In order for the Division to release confidential information about the seller to the purchaser, the seller must complete a M-5008-R form authorizing the release of such tax information and forward the completed form to the Division's bulk sale section. The form with instructions can be found Taxation's website.
20. Q: Can the C-9600 form be hand-delivered or faxed to the Division?
A: No, the statute stipulates registered mail or by a form the Director may prescribe which is overnight. The Division's present policy is to have the notice form delivered by registered mail, certified mail, overnight mail, Fed-Ex or UPS only as this provides clear confirmation of receipt by the Division. Also, these methods provide the purchaser with proof of delivery.
21. Q: How much time does the Division have to respond to the purchaser from the date of receipt of the C-9600 form notifying the Division of the transfer?
A: The statute states that "Within 10 days of receiving such notice, the director shall notify the purchaser, transferee or assignee by such means as the director may prescribe that a possible claim for State taxes exists and include the amount of the State's claim." There is no shorter time period or any expedited procedure.
22. Q: Suppose the purchaser is unsure if the bulk sale statute applies to her transaction? What should she do?
A: When in doubt, file a completed bulk sale C-9600 form notice in a timely manner. This does not automatically mean that the Division will treat the transfer as falling within the bulk sale law, but it guarantees that the purchaser will not incur any tax liability of the seller for failure to comply with the notice provisions of the law.
23. Q: Where can the purchaser obtain the C-9600?
A: The form and information can be downloaded at and printed from the Taxation website.
24. Q. What is the responsibility of the Division once it receives the C-9600 form notice from the purchaser?
A. The Division must, within 10 business days of timely receiving the notice with a copy of the fully executed contract, notify the purchaser that a possible claim for State taxes exists and include the amount of the claim and require the purchaser to hold that amount in escrow.
25. Q. What is the responsibility of the purchaser if the Division fails to timely notify the purchaser of the possible claim and escrow amount requirement?
A. If the Division fails to notify the purchaser of escrow obligations in a timely manner, the bulk sale law provides that "the purchaser, transferee or assignee may transfer over to the seller, transferrer or assignor any sums of money, property or chooses in action, or other consideration to the extent of the amount of the State's claim. The purchaser, transferee or assignee shall not be subject to the liabilities and remedies imposed under the provisions of the uniform commercial code, Title 12A of the Revised Statutes of New Jersey, and shall not be personally liable for the payment to the State of any such taxes theretofore or thereafter determined to be due to the State from the seller, transferrer or assignor."
26. Q: What is the responsibility of the purchaser after receiving the timely notice of a possible claim and claim amount from the Division?
A. The purchaser or the purchaser's escrow agent, if any, must hold in escrow the amount claimed. Neither the seller nor any agent of the seller, may hold the escrow, because the purchaser loses control and could be held accountable for unpaid demands by the Division. If the purchaser or his agent do not hold the escrow as instructed by the Division, the purchaser may be liable for the seller's tax obligations.
27. Q: The closing on the transfer occurred without notifying the Division, but the parties decided to hold an agreed upon amount in escrow. Is the purchaser protected from liability for the seller's tax obligations?
A: No. If the sale occurred without proper notification the purchaser automatically assumes any and all liability of the seller. The agreed upon escrow is a third party agreement that the Division was not party to and does not satisfy the bulk sale law requirements.
28. Q: What does an escrow entail?
A: The escrow is calculated using several factors, including but not limited to internal and external information, established liabilities, outstanding unfiled returns, gain from the disposition of the assets and any final returns.
29. Q: Can escrows exceed the purchase price? Why?
A: Yes. The Tax Court has indicated that escrows can exceed the purchase price ("There is no apparent limitation on the dollar amount of delinquent tax liability that may be assumed by the purchaser of a business if he fails to properly notify the Director of an impending closing. Indeed, a purchaser may assume personal liability for the seller's delinquent taxes in excess of the price he pays for the business assets." Bunting v. Director, Division of Taxation, 1 N.J. Tax 189, 197 (T.C. 1980)). The escrow amount may accurately reflect the tax obligations of the seller that must be met before the transfer transaction may proceed, even if the amount exceeds the purchase price. Furthermore, the bulk sale statute, when properly followed, protects the purchaser from being responsible for the seller's tax liability. The escrow required to be withheld by the purchaser informs the purchaser of the potential cost it may incur for non-compliance with the bulk sale law, which, again, may exceed the purchase price.
30. Q: What if there are no proceeds from the sale or the proceeds are insufficient to meet the escrow amount required by the Division?
A: The bulk sale statute cannot protect a purchaser if he fails to follow procedures prescribed by the bulk sale section. However, the Division will determine escrow amounts to be held based on all the facts as presented by the parties.
31. Q: Can the escrow be reduced?
A: In some instances new information is given to the Division after the initial requested escrow was sent to the purchaser. A reduction could possibly be afforded provided that the additional facts and information in support of a request for a reduction is substantiated.
32. Q: When will escrow be released, if at all, to the seller?
A: Once the Division is assured that all tax obligations of the seller have been met, it will issue a letter to the purchaser or his agent allowing the purchaser to release the balance of the escrow funds to the seller.
33. Q: Can an escrow letter or clearance letter be faxed?
A: The Division mails all correspondences to all parties. The escrow letter and tax clearance letters can be sent by fax, but the Division is not responsible for misdirected or non-receipt of faxes.
PROCEDURE FOR THE FILING OF THE TTD FORM:
34. Q: What is the TTD (Asset Transfer Tax Declaration) form?
A: It is the form that sellers in bulk sales transactions are to use to supply the Division with information about possible income tax gain on the sale of business property. It assists the Division in calculating a more accurate amount of taxes which need to be held in escrow by the escrow agent.
35. Q: Is the TTD form required for the purchaser's C-9600 notification to be complete? Who completes and provides the TTD?
A: No, it is not required for the purchaser to meet the purchaser's notification requirements. It is up to the seller to obtain the TTD form and is used to calculate a more accurate escrow. The form is provided by the seller or its authorized representative and includes confidential tax information that the seller may not want to disclose to a prospective purchaser. The TTD form along with instructions can be found at Taxation's website.
36. Q. In order to show a more accurate basis for income gain on the sale, shouldn't the TTD form have a line showing the purchase price when the seller bought the real property?
A. It does. This is what is meant by "Cost After Depreciation" on line 3.
37. Q: When can the TTD form be submitted?
A: It can be submitted after the case has been assigned to an investigator (upon receipt of the C-9600 form from the purchaser) who will send a letter to the seller requesting the TTD form and other tax information. Premature submissions, however, could result in loss of the TTD form or delays.
38. Q: Where can the seller obtain the TTD form, besides directly from the Bulk Sale Unit of the Division?
A: The form with instructions can be downloaded at and printed from Taxation's website.
TYPES OF TRANSFERS:
39. Q: Can an estate sale be considered a bulk sale?
A: Yes, if the assets being conveyed are business assets.
40. Q: Are the sales of intangibles considered a bulk sale?
A: Transfer of assets such as, but not limited to, delivery routes, goodwill, non-compete agreements, patient lists, recipes, trademarks, patents and the like are considered a transfer of business assets and the Division should be notified in accordance with the statute.
41. Q: Are transfers of disregarded entities subject to the bulk sale law?
A: Yes. For tax purposes, a disregarded entity is one that is separately taxed as part of a different entity. Disregarded entities that were previously formed with the New Jersey Secretary of State must register with the Division of Revenue in the Department of Treasury. Delays in the transfer can occur if an entity has been formed but is not registered. The Division of Taxation cannot give an escrow request to a purchaser for an entity that does not exist on the Division's tax rolls. Accordingly, a C-9600 form notice will be considered incomplete if the Division is unable to identify the entity in its records.
42. Q: Is the transfer of real estate that is used for income purposes covered by the bulk sale law?
A: The bulk sale statute makes no exclusion for sales of real estate. A business is any endeavor that creates profit or loss. Therefore, when any realty that is a business asset is being conveyed other than in the ordinary course of business, in whole or in part, such transaction is subject to the bulk sale statute. If the title owner is ordinarily in the business of selling such property, however, the bulk sale law would not apply.
43. Q: Why is the transfer of real estate used for income purposes be considered a bulk sale?
A: The bulk sale statute as enacted in 2007 as well as prior to 2007 never exempted real estate. The 2007 amendment, among other changes, required the collection of not just sales tax, but of all State taxes. Accordingly, this broadened the scope to all the taxes the Division administers that were not covered by the original statute in the sales and use tax law, including gross income tax on gains from the sale of real estate. Since there was no penalty (such as a fine) for not filing a notice of sale, transfer, or assignment in bulk, other than the transfer of tax liability prior to the change, if an entity owning real estate did not have sales or business personal property tax obligations (as an owner of commercial real estate often would), the Division could not seek collection of tax on income gain from the sale of residential real property, even where that property included income producing assets. Therefore, the 2007 change in the law now requires the purchaser of income producing property to notify the Division of the transfer, because all State taxes are now subject to collection by way of the transfer.
44. Q. A home owner who has a full time job elsewhere, sells merchandise (e.g. chocolate, books, jewelry, tupperware, religious items, etc.) from her home, working out of a room in her home. She does this sporadically. The home is zoned residential, but a local ordinance allows for part time in-home businesses in the zone. When she and her spouse/partner sell the home, must the purchasers file a C-9600 form even if the home owner stops selling merchandise in the home before closing and will be taking all of the merchandise with her when she moves? The purchasers, of course, consistent with the local zoning ordinance, may choose whether or not to run a business out of their home.
A. If the homeowner is expensing the portion of the home on her tax return as a home office and receiving a tax benefit from operating a business out of the home, sale of the home must be reported by timely filing the C-9600 form.
45. Q. Is the sale of vacant land, even by a business but not used for income producing purposes (e.g. a parking lot), a bulk sale transfer?
A. Yes. Vacant land owned by a business (that is, an entity that creates profit or loss) is a business asset.
46. Q. Is the sale of residential real property, such as single and multi-family homes and condominiums, used to obtain rental income, also covered by the bulk sale law?
A. Yes, unless the title owner is ordinarily in the business of selling such residential properties. In such a situation, however, the Division may require documentation establishing that the title owner actually conducts or is otherwise actively involved in that kind of business before exempting any particular transfer from application of the bulk sale law. Also, even property rented to family members or friends are considered business assets. Accordingly, sales of such property fall under the coverage of the bulk sales law.
47. Q. Are there any exceptions to the above answer? For example, does the bulk sale law apply to the sale of the residential property if it is only being rented for a short period of time (e.g. three months) or all or most of the property is owner-occupied with only a smaller part being rented?
A. Generally, the bulk sale law, N.J.S.A. 54:50-38, applies to transactions "Whenever a person shall make a sale, transfer, or assignment in bulk of any part or the whole of the person's business assets, otherwise than in the ordinary course of business." The law does not limit applicability to where only a part of realty is being used as a business asset. If in doubt, the buyer should always file a C-9600 form with the Division in a timely manner to ensure protection against liability for the seller's tax debts.
48. Q. Taxpayer owns real property that has business income. The taxpayer has outstanding State tax liabilities and decides to create an LLC or corp. in which he is the sole member. The LLC/corp. has no tax liabilities. The taxpayer conveys title to the LLC/corp. but the LLC/corp. does not file a C-9600 form. The LLC/corp. then contracts with and sells the real property to a third party purchaser who timely files a C-9600 form. Subsequently, the Division discovers that the LLC/corp. failed to file form C-9600 in the previous transfer. However, the LLC/corp. has no assets except for title ownership in the real property that has now been conveyed to the third party purchaser. How does the Division know about the previous transaction and what action will the Division take to recover the State tax liabilities of the taxpayer? And does it matter if the LLC was single or multi-member?
A. If the transfer from the taxpayer to the LLC comes to light after the transfer to the third party, and the third party purchaser filed the necessary forms and received a purchaser's clearance, the third party will be held harmless. The Division would go after the taxpayer that owed the original taxes. If the transfer between the taxpayer and the LLC comes to light prior to the sale to the third party, this would be taken into account when the amount of escrow is calculated.
49. Q. Suppose the purchaser doesn't know that the house was used for rental purposes (e.g. the seller inadvertently or intentionally doesn't disclose this fact)? Unknown to the buyer, the seller resided in the one-family house as his principal residence most of the year but would rent it out when he went on long vacations out of state which he did not disclose. The purchaser doesn't provide the C-9600. Is the purchaser liable for the seller's tax liabilities? Would it make any difference if the seller provides an affidavit to the purchaser or put in the sales contract that the house had not been used for any rental or other business?
A. The Division cannot control what the seller does or does not tell the purchaser. Either way, if the purchaser does not file the notice, the purchaser is still liable for any State tax liabilities of the seller. If the seller omits to tell purchaser of the income producing nature of the property, then the purchaser can take legal action against the seller for any seller's state tax liabilities that the Division seeks to assess against the purchaser. Obviously, the seller can provide the purchaser with whatever affidavit it wants to. However, the Division is not bound by any such affidavit in determining liability for failure to file the C-9600 notice. Again, if the affidavit is misleading or in some other way incorrectly states that the property is not income producing, the purchaser's recourse for failure to file the C-9600 notice is to take legal action against the seller for any seller's state tax liabilities that the Division seeks to assess against the purchaser.
50. Q. Does the bulk sale law apply to the sale of interests in time shares?
A. If the time share is being used to obtain rental income, then its sale, when not being made in the ordinary course of business, falls within the requirements of the bulk sale law. Again, if in doubt, the buyer should file a C-9600 form with the Division in a timely manner to ensure protection against liability for the seller's tax debts.
51. Q. Is the transfer of new construction on real estate covered by the bulk sales law?
A. Usually, no. Such a transfer is often being done in the ordinary course of business by a developer or title owner whose business it is to build on and sell real estate with the new construction. Only the transfer of real estate by a title owner who is not ordinarily in the business of conveying real estate, is covered by the bulk sales law. For example, a title owner who is not ordinarily in the business of building new construction or selling real estate, may build new construction with the original intent of leasing it, which she does for six months. At the end of the six month lease, she decides to sell the property. She is not selling it in the ordinary course of business.
52. Q: Is a short sale of realty considered a bulk sale?
A: Yes, as long as the realty includes a business asset that is being sold, transferred or assigned. A bank approval letter should be submitted with the C-9600 form.
53. Q. In a short sale transaction of commercial or rental property, or in a situation where there is no equity or proceeds from the sale that can be held in escrow, not made in the ordinary course of business, must the seller still bring money in the amount of the Division's requested escrow, to the closing?
A. An escrow amount as determined by the Division, must be held by the purchaser or his escrow agent. This even holds true for a deed-in-lieu of foreclosure transaction where real commercial or rental property is being taken back by the mortgagee. If the mortgagee fails to timely file the C-9600 form, the mortgagee will be held liable by the Division for any outstanding tax liability of the seller.
54. Q: Is a foreclosure considered a bulk sale?
A: In a formal foreclosure process, a sheriff's deed is used to transfer assets to a transferee free and clear without encumbrances. However, a deed in lieu of foreclosure is a conveyance from the actual title owner to the mortgagee, and thus, if the property is or has been used for income producing purposes, it is considered a bulk sale transfer requiring proper and timely notice to the Division from the mortgagee.
55. Q. In a transaction where business assets are being transferred not in the ordinary course of business, and where the seller is a non-resident, is the amount paid with the GIT/REP-1 non-resident declaration form, taken into consideration in determining the amount?
A. Yes, as long as the Division is made aware of the gross income tax withholding.
56. Q. Is a seller/title owner who buys for investment purposes and rehabilitates property not for rent and then sells it, selling in the ordinary course of business and thus subject to the bulk sales law?
A. If it is in the seller's ordinary course of business to buy, rehabilitate and then sell properties (i.e. this is an activity that the seller does on a regular, as opposed to irregular, infrequent basis), then, generally speaking, these sales would not be subject to the reporting requirements of the bulk sales law. However, if in doubt, the buyer should file the C-9600 to obtain the protection against the potential of being liable for the seller's tax liability.
57. Q: Is the conveyance of a single family home that has been used solely as a primary residence lived in by the seller, subject to the bulk sale statute?
A: No. A single family home used as a primary residence, not used for business, including rental income purposes, is not considered a business asset.
58. Q. If the seller is a tax-exempt or non-profit organization, including but not limited to a church/synagogue/temple/mosque, is selling its real property and/or personal property not in the ordinary course of business, does the purchaser have to file a C-9600 form with the Division?
A. Yes. Even though the seller may be exempt from certain tax liabilities, it may still have certain tax obligations such as employee tax withholdings or sales tax obligations if, for example, it operates an on-site gift shop that is in competition with local businesses, or purchases items not used for organization purposes.
59. Q. In a bulk sale transaction, if taxes are not payable until tax returns are filed the following year, does the seller still have to pay them out of the escrow held by the buyer, irrespective of when payment is actually due?
A. The bulk sale law requires the reporting of all taxes that are due or may be owing, but not yet technically due to be paid. Accordingly, all sellers of bulk sales are required to pay not just owed, but taxes that are only estimated, as the estimated payment ensures the filing of a final return.
60. Q. Has the Division required that escrow money be set aside for debt forgiveness?
A. No. Debt forgiveness is not taxable income for the State of New Jersey.
61. Q. How does the Division find out about a sale not done in the ordinary course of business, especially of residential real property, if no C-9600 form is ever filed?
A. Enforcement issues are handled on a case by case basis. Regarding the sale of real estate, the Division is able to audit sales by reviewing records at county clerk, zoning and municipal tax collector offices and Mod IV records which can reveal whether property which is or may be income producing has been sold. If evidence of an unreported bulk sale is found, the Division will contact the owner (i.e. buyer/transferee) in an attempt to obtain payment once the Division makes an assessment of any outstanding tax liability of the seller. If this effort is unsuccessful, the Division will seek establishment and enforcement of the tax liability against the seller, including the filing of a certificate of debt in Superior Court. If the Division is unable to obtain tax payment compliance from the seller, the Division will seek collection of the seller's tax liability from the purchaser.
62. Q. Is the seller's tax identification number ("TIN") in the box in the right side of the C-9600 form which includes the seller's liquor license number, only required on the transfer of a liquor license?
A. No. The TIN is required on all bulk sale transfer C-9600 form notices. Also, the TIN and the federal employer identification number may be different, so all information requested should be filled in.
63. Q. Where can other information about the administration of the bulk sale law by the Division be found.
A. Other information and guidelines may be found in Technical Bulletin 60 which was drafted and posted soon after the present law was enacted in 2007.
64. Q. How can the Division be contacted for further information about the bulk sale law and its implementation?
A. Written inquiries can be submitted to the Division by writing to:
Bulk Sales Unit
New Jersey Division of Taxation
P.O. Box 245
Trenton, New Jersey 08695-0245
Phone inquiries may be made to (609) 292-6604 with a request to speak to an employee in the Bulk Sales Unit.
E-mail inquiries may also be submitted and following the instructions for completion of the e-mail message contained on that webpage.