Purchasing items through the mail is an easy and convenient way to shop. When you make purchases from a mail order or Internet business located in New Jersey, the business is required to collect sales tax on taxable orders delivered within this State. However, many mail order and Internet companies are located out-of-State. Companies that don't have an office or employees in New Jersey and do not use their own vehicles to deliver goods into this State are not required to register or collect New Jersey sales tax. Some of these companies register voluntarily and receive authorization from the Division to collect the tax.
If you purchase taxable merchandise from an out-of-state mail order or Internet business and no New Jersey sales tax is collected, you owe 7% use tax on the purchase price of the goods. Use tax is due within twenty days after the merchandise is delivered into New Jersey. As of 10-1-06, delivery charges (shipping, handling, postage, etc.) imposed by the seller are also subject to tax if the goods purchased are subject to tax. If your order includes both taxable and exempt goods, the delivery charge may be allocated based on the sales price of the taxable property compared to the total sales price. Use tax is due on the portion of the delivery charge that relates to the taxable goods.
Individuals may report and pay any use tax due when filing their New Jersey Resident Income Tax Return, Form NJ-1040
, or may complete a Use Tax Remittance, Form ST-18
, to pay the tax.
More information on mail order businesses is available in our publication Tax Topic Bulletin S&U-5
, Making Mail-Order and Internet Sales. Publication S&U-5
can be viewed in Adobe Acrobat