Sales and Use Tax Guidelines
New Jersey requires that a tax of 6.625 percent be applied to retail sales of tangible personal property and sales of certain services under the New Jersey Sales and Use Tax Act. Most services pertaining to tangible personal property are taxable unless specifically exempted by law. Exempt items include
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most food sold as grocery items;
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most clothing and footwear;
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disposable paper products for household use;
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prescription drugs; and
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over-the-counter drugs.
Rutgers is generally exempt from New Jersey sales and use tax pursuant to N.J.S.A.54:32B-9. Section 54:32B-9 for exempt organizations, which states: (a) Except as to motor vehicles sold by any of the following, any sale, service or amusement charge by or to any of the following or any use or occupancy by any of the following shall not be subject to the sales and use taxes imposed under this act; (1) The State of New Jersey, or any of its agencies, instrumentalities, public authorities, public corporations (including a public corporation created pursuant to agreement or compact with another state) or political subdivisions where it is the purchaser, user or consumer, or where it is a vendor of services or property of a kind not ordinarily sold by private persons.
Accordion Content
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The Rutgers New Jersey Sales Tax Exemption Letter is provided by the state of New Jersey and may be used by authorized personnel to exempt university purchases from sales and use tax from any vendor. ST-5 or other sales tax forms are not required.
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Because Rutgers University can operate as a vendor, the university is required to collect sales tax. State law specifies that the purchaser is liable for paying sales tax; vendors are responsible for collecting tax and remitting it to the state.
When making sales for goods or services to outsiders, all university units must report these transactions through the general ledger accounting system using proper natural account and account information each month following the sale month. The Tax Department consolidates all taxable sales and generates a monthly report detailing taxable and nontaxable sales, as well as all tax withheld. It also uses the monthly report to file sales tax returns and remit New Jersey sales tax collected to the state.
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In addition to sales tax on hotel/motel room rentals, New Jersey charges a State Occupancy Fee and Municipal Occupancy Tax. State instrumentalities such as Rutgers are exempt from the fee and tax. The same letter used to exempt Rutgers from sales and use tax is also used to exempt the university from the New Jersey State Occupancy Fee and Municipal Occupancy Tax.
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Rutgers may be exempt from sales and use tax in other jurisdictions depending on the individual state laws and regulations.
The Out-of-State Sales Tax Exemption Chart outlines the states where Rutgers is exempt from sales tax, no sales tax exists, and/or the university is considered a taxable entity. In states where Rutgers is exempt from sales and use tax, see the tax exemption certificates or contact the Tax Department for individual state exemption certificates to provide to an out-of-state vendor.