New Jersey imposes various requirements on sellers doing business in the state. We recommend that you go through the items below to help you with the most frequently asked questions concerning sellers and sales and use tax issues.

Procedure for accepting resale certificates. In New Jersey a resale certificate (Form ST-3) must be used for the exemption to apply. The certificate should be signed and indicate the name, address, certificate of authority number of the purchaser, and the basis of exemption. The following requirements must be met in order for a certificate to disclose a proper basis for exemption:

• the certificate must be an official form or reproduction
• the certificate has to be dated and executed according to instructions and complete in all respects
• a proper basis for exemption must be stated
• you have no reason to believe that property purchased is not ordinarily used in the purchaser's business for the purposes disclosed in the certificate
• You must exercise good faith in each transaction (each transaction is a separate claim for exemption if a blanket certificate is accepted)

Procedure for accepting blanket certificates. As a seller you may accept a blanket certificate if your customer repeatedly purchases the same type of property or service for processing or resale. However, blanket certificates may not be used to purchase property or service not covered by a blanket certificate. You must accept a blanket certificate in good faith, or else liability for the tax does not shift from you to the purchaser.

Sales and use tax liability for out-of-state mail order and catalogue retailers. New Jersey has a statute that specifically taxes out-of-state mail order and catalogue sellers. However, you will be responsible for paying this tax only if you have physical presence within New Jersey. To determine if you have physical presence, ask yourself the following:

• Do I have retail facilities, a warehouse, or any office space in New Jersey? Maintaining retail or warehouse facilities will give you physical presence. Also, having an office for employees, even for business activities unrelated to mail order sales, will give you physical presence.
• Do my employees or I enter New Jersey for purposes of taking and transmitting orders from New Jersey? If your employee or independent contractor goes into New Jersey to take or transmit orders, your business may have physical presence in New Jersey. However, contracting with a common carrier to deliver mail order goods does not constitute physical presence.
• Do my delivery vehicles frequently enter New Jersey for purposes of delivering property? Frequent deliveries in New Jersey by your trucks will give you physical presence in New Jersey.

Sales tax "bracket system." The bracket system may be followed by sellers in computing the sales tax. The tax is computed on each dollar and/or fraction of a dollar according to the following table:

Absorbing the tax — using a "no sales tax" advertising strategy to drum up business. In New Jersey it is against the law to refund or offer to refund all or any part of the amount collected, or to absorb the amount of sales tax required to be added to the sales price and collected from the purchaser. As a seller, it is also against the law for you to advertise directly or indirectly that you will absorb the sales tax that is required to be added to the sales price.

Claiming refund for excess tax payments. As a seller, you may exclude from taxable receipts, charges, or rentals of amounts representing sales when the sale has been canceled or the property has been returned. You or your customer who has actually paid the tax may file for a refund. You can only file for a refund if you:

• have collected the tax and paid it to the state,
• filed the application within four years after receiving payment from the customer, and
• satisfactorily establish that the refund amount applied for has been repaid to your customer.