Out-of-State Purchases Received Outside New Jersey. When taxable property and services are purchased and received in another state, and sales tax is paid to that state, New Jersey will allow a credit against the Use Tax due, provided that the other state allows a similar credit for Sales Tax paid to New Jersey.
If the sales tax rate in a reciprocating state is equal to or greater than New Jersey’s tax rate, no Use Tax is due. If the sales tax rate in the state where the purchase is made is less than New Jersey’s, Use Tax is due at the current rate. However, a credit for the sales tax paid in another state is allowed against the Use Tax due. For example, if a buyer made an out-of-State purchase on January 11, 2018, for $100 and the sales tax rate was 4%, the buyer paid $4 in sales tax. The New Jersey Use Tax rate in effect for that period is 6.625%, so the buyer owes $6.63 (6.625% × $100), less a credit for the $4 already paid to the other state, for a New Jersey Use Tax due of $2.63.
Out-of-State Purchases Delivered to New Jersey. When taxable property and services are purchased in another state and delivered to New Jersey for use in New Jersey, no credit is allowed for sales tax paid to the other state. Use Tax is due on the purchase price, including delivery charges.
Purchases Made in a Foreign Country. When taxable property and services are purchased in a foreign country, no credit is allowed for sales tax paid to the foreign country, regardless of whether the purchaser takes possession of the items there or has them delivered to New Jersey. Use Tax is due on the purchase price, including delivery charges.
Individual taxpayers report and remit use tax by either completing and filing the Use Tax Return (Form ST-18) within 20 days after property is brought into New Jersey or by reporting any use tax due on Line 44 of their resident income tax return, Form NJ-1040.
For More Information Contact the Division’s Customer Service Center at 609-292-6400, or email us. Many State tax forms and publications are available on our website.