Both of these forms require you to fill in a tax identification number — which means you must have applied for and received a permit to collect sales tax (and must then file periodic sales tax returns). If you’re not registered to collect sales tax in New Jersey, you can use either your tax registration number from another state(s) or your federal employer identification number.
Learn more about the New Jersey resale certificate in New Jersey’s Bulletin S&U-6.
Be aware that sellers are not required to give you the tax exemption, even if you present a valid resale certificate. Target, for one, is well-known for refusing to accept resale certificates. Also, they are required to check that your certificate is legit, and can suffer major penalties if it’s not — so don’t bother trying to fake it.
You may be wondering what happens if you never sell the items you bought tax-free. If they are determined to be unsellable, you can remit use tax rather than sales tax on them to avoid the penalty.
As stated above, you’re not required to give a sales tax exemption to anyone who asks for it, even if they have a resale certificate. Be aware that if you do, the responsibility lies with you to confirm the validity of the certificate.
If it turns out to be invalid, you could be on the hook for paying the sales tax, plus assorted fines and penalties.
Make sure that the certificate is completely filled out, including tax registration number, date and signature. If you accidentally accepted one that is incomplete or incorrect, you have 90 days to obtain a revised one from the buyer.
The State of Jersey offers a quick link to check the authenticity of the resale certificate.
The New Jersey Division of Taxation requires that you keep the certificate in your files for 4 years from the date of the transaction, so that it can be inspected if necessary.
Of course, to accept a resale certificate, your own business must be registered to collect sales tax in New Jersey.
Have more questions about sales tax exemptions, registrations, collections or filings in the state of New Jersey? Leave it to your Xendoo tax professional to keep all that part of your business running smoothly, so you can spend more time doing what you love.