Article Structure
The ST-3 form, also known as the New Jersey Resale Certificate, plays a crucial role in the state's sales tax system. It allows sellers to avoid collecting sales tax on transactions involving taxable property or services when the purchaser provides a completed exemption certificate. This certificate is essential for businesses that engage in the resale of goods or services, as it confirms their eligibility to make tax-exempt purchases. To use the ST-3 form, the purchaser must fill out specific information, including their New Jersey Taxpayer Registration Number, the nature of their business, and details about the merchandise or services being purchased. The form also requires the purchaser to certify that they hold a valid Certificate of Authority to collect sales tax and that the items being bought are for resale or for use in a taxable service. Sellers must retain these certificates for at least four years, ensuring they are available for inspection if needed. Understanding the proper use of the ST-3 form is vital for both sellers and purchasers to navigate New Jersey's sales tax regulations effectively.
Form Sample
New Jersey Division of Taxation |
|
Sales Tax |
|
|
Resale Certificate |
Check applicable box:
Blanket Certificate
The seller must collect Sales Tax on the sale of taxable property or services unless the purchaser gives them a fully completed exemption certificate.
Do not mail this form to the Division of Taxation.
Seller
Name
Address
Street |
City |
State |
ZIP Code |
Purchaser
New Jersey Taxpayer Identification Number
Name*
As registered with the New Jersey Division of Taxation
Address*
Street |
City |
State |
ZIP Code |
Type of Business*
The purchaser certifies that:
(1)They hold a valid Certificate of Authority to collect New Jersey Sales and Use Tax.
(2)They are principally engaged in the sale of (indicate nature of property or service sold):
(3)The property or services being purchased are described as follows:
(4)The property described above is being purchased for (check all boxes that apply):
Resale in its present form.
Resale as converted into or as a component part of a product by the purchaser.
Use in the performance of a taxable service on personal property and will become part of the property being serviced or will later be transferred to the purchaser of the service in conjunction with the performance of the service.
(5)The services described above are being purchased (check the box that applies):
By seller who will either collect tax or will resell services.
To be performed on personal property held for sale.
I, the undersigned purchaser, have read and complied with the instructions and rules promulgated pursuant to the New Jersey Sales and Use Tax Act with respect to the use of the resale certificate, and it is my belief that the seller named herein is not required to collect the Sales or Use Tax on the transaction or transactions covered by this certificate. The undersigned purchaser hereby swears under the penalties for perjury and false swearing that all of the information shown in this certificate is true.
Print Name
Authorized Signature*
(Owner, Partner, Corporate Officer)
Title |
|
Date |
*Required
This form may be reproduced
Form
Completing the Certificate
To claim an exemption from Sales Tax on the purchase of taxable property or services, the purchaser must provide a fully completed exemption cer- tificate to the seller. Otherwise, the seller must collect the tax. The purchaser must provide the following information for the exemption certificate to be considered fully completed:
•• Name and address;
•• New Jersey taxpayer identification number;
•• Type of business;
•• Reason(s) for exemption;
•• Signature, if using a paper exemption certificate (including fax).
The seller’s name and address are not required for the exemption certificate to be considered fully completed.
Accepting the Certificate
A seller must be registered to accept an exemption certificate. The seller is relieved of liability for collecting Sales Tax on transaction(s) covered by the certificate as long as the certificate is fully completed and is received within 90 days of the date of sale. The seller is relieved of liability even if the pur- chaser improperly claimed the exemption, in which case the purchaser will be held liable for nonpayment of the tax.
Accepting the Certificate in an Audit Situation
If the seller either has not obtained an exemption certificate or has obtained an incomplete exemption certificate, the seller has at least 120 days after the Division’s request for substantiation of the claimed exemption to either:
1.Obtain a fully completed exemption certificate from the purchaser taken in good faith, which in an audit situation means the exemption:
•• Was statutorily available on the date of the transaction(s); and
•• Could apply to the property or service being purchased; and
•• Is reasonable for the purchaser’s type of business; or
2.Obtain other information establishing that the transaction(s) was not subject to tax.
If the seller obtains this information, the seller is relieved of any liability for the tax on the transaction unless it is discovered through the audit process that the seller had knowledge or had reason to know at the time the information was provided that the information relating to the exemption claimed was materially false or the seller otherwise knowingly participated in activity intended to purposefully evade the tax that is properly due on the transaction. The burden is on the Division to establish that the seller had knowledge or had reason to know at the time the information was provided that the informa- tion was materially false.
Blanket Certificates
A single exemption certificate may cover additional purchases of the same general type of property by the same purchaser with which the seller has a recurring business relationship. For purposes of this section, a recurring business relationship exists when a period of no more than 12 months elapses between sales transactions.
To use this form as a blanket certificate, check the applicable box at the top of the form. Each subsequent sales slip or purchase invoice based on the blanket certificate must be clearly marked with the purchaser’s name, address, and identification number.
Retention of Certificates
Certificates must be retained by the seller for four years from the date of the last sale covered by the certificate. Certificates must be in the physical possession of the seller and available for inspection. A seller that enters data elements from paper into an electronic format is not required to retain the paper exemption certificate.
Examples
Proper Use of Form
1.A retail appliance store owner issues a resale certificate when purchasing appliances from a supplier for resale.
2.A furniture manufacturer issues a resale certificate when purchasing lumber to be used in manufacturing furniture for sale.
3.A service station operator issues a resale certificate when purchasing auto parts to be used in repairing customers’ cars.
Improper Use of Form
In the examples below, the seller cannot accept a resale certificate and must collect Sales Tax.
1.A lumber dealer cannot accept a resale certificate from a tire dealer that is purchasing lumber for use in altering its premises.
2.A distributor cannot issue a resale certificate on purchases of cleaning supplies and other materials for its own office maintenance, even though it is in the business of distributing such supplies.
3.A retailer cannot issue a resale certificate on purchases of office equipment for its own use, even though it is in the business of selling office equipment.
4.A supplier cannot accept a resale certificate from a service station that purchases tools and testing equipment for use in its business.
5.A contractor cannot issue Form
For more information, see
Document Specifications
| Fact Name | Fact Description |
|---|---|
| Purpose | The ST-3 form is a resale certificate used in New Jersey for tax exemption on purchases intended for resale. |
| Seller's Responsibility | Sellers must collect sales tax unless they receive a fully completed ST-3 form from the purchaser. |
| Certification Requirement | The purchaser must certify that they hold a valid Certificate of Authority to collect sales tax. |
| Retention Period | Sellers are required to keep the ST-3 form for at least four years from the date of the last sale covered by the certificate. |
| Governing Law | This form is governed by the New Jersey Sales and Use Tax Act. |
| Exemption Claim | If a purchaser improperly claims an exemption, they will be held liable for any unpaid taxes. |
Steps to Filling Out St 3 New Jersey
Filling out the ST-3 New Jersey form is a straightforward process. It involves providing specific information about the purchaser and the nature of the transaction. The completed form should be given to the seller, who will retain it for their records. Below are the steps to guide you through the process of completing the form.
- Begin by entering the date at the top of the form.
- Write the name of the seller in the designated space.
- Fill in the seller's address, including the city, state, and ZIP code.
- Provide your New Jersey Taxpayer Registration Number in the appropriate field.
- Indicate the nature of your business by specifying what you primarily sell.
- Describe the merchandise or services you are purchasing in the provided section.
- Check the applicable boxes regarding how the purchased items will be used:
- For resale in its present form.
- For resale as converted into or as a component part of a product.
- For use in a taxable service on personal property.
- If applicable, check the box regarding the services being purchased:
- By the seller who will collect tax or resell services.
- To be performed on personal property held for sale.
- Sign the form, ensuring that the signature belongs to an owner, partner, or corporate officer.
- Fill in the title of the person signing the form.
- Include the name and address of the purchaser as registered with the New Jersey Division of Taxation.
- Make sure all required fields are completed before submitting the form to the seller.
More About St 3 New Jersey
What is the ST-3 form in New Jersey?
The ST-3 form is a Resale Certificate used in New Jersey. It allows sellers to collect sales tax on taxable property or services unless the purchaser provides a fully completed exemption certificate. This form certifies that the purchaser is authorized to buy items for resale without paying sales tax at the time of purchase.
Who needs to fill out the ST-3 form?
The purchaser must complete the ST-3 form. This includes businesses that are registered to collect sales tax in New Jersey. The form must include specific information about the purchaser, such as their New Jersey Taxpayer Registration Number, business type, and the nature of the merchandise or services being purchased.
What information is required on the ST-3 form?
The ST-3 form requires several key pieces of information. This includes the purchaser’s name and address, type of business, the reason for the exemption, and the New Jersey tax identification number. If the purchaser is not registered in New Jersey, they must provide their Federal employer identification number or out-of-state registration number. Individual purchasers must include their driver’s license number.
How long must sellers keep the ST-3 form?
Sellers must retain the ST-3 form for at least four years from the date of the last sale covered by the certificate. The form must be in the physical possession of the seller and available for inspection if requested by tax authorities.
What happens if a seller does not collect sales tax when required?
If a seller accepts an incomplete or incorrect ST-3 form and fails to collect sales tax, they may be held liable for the tax. However, if the seller obtains a fully completed exemption certificate within 120 days after being asked for proof during an audit, they can be relieved of this liability.
Can the ST-3 form be used for multiple purchases?
Yes, the ST-3 form can cover additional purchases by the same purchaser of the same general type of property. However, each subsequent purchase must still include the purchaser's name, address, and New Jersey, Federal, or out-of-state registration number for verification purposes.
What are some examples of proper use of the ST-3 form?
Proper use of the ST-3 form includes scenarios like a retail store owner purchasing inventory for resale or a manufacturer buying raw materials to create products for sale. Each of these situations involves items intended for resale, qualifying for the exemption.
What are some examples of improper use of the ST-3 form?
Improper use occurs when a purchaser tries to use the ST-3 form for items not intended for resale. For instance, a tire dealer cannot use it to buy lumber for their premises, and a retailer cannot use it to purchase office equipment for their own use. In these cases, the seller should collect sales tax.
Where can I find more information about the ST-3 form?
For additional details about the ST-3 form and the sales tax exemption process in New Jersey, you can read publication S&U-6 (Sales Tax Exemption Administration) available on the New Jersey Division of Taxation's website.
Common mistakes
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Incomplete Information: Failing to provide all required details can lead to the rejection of the exemption certificate. Essential information includes the purchaser's name, address, type of business, and tax identification number.
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Incorrect Signature: The form must be signed by an authorized individual, such as an owner or officer. A signature from an unauthorized person can invalidate the certificate.
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Misunderstanding the Purpose: Some purchasers mistakenly use the certificate for items or services not intended for resale. It is crucial to ensure that the purchased goods align with the resale purpose outlined in the form.
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Failure to Retain Copies: Sellers are required to keep the completed certificates for a minimum of four years. Not retaining these documents can result in liability for unpaid taxes if audited.
Documents used along the form
The ST-3 form is a crucial document in New Jersey for sellers and purchasers involved in taxable transactions. However, it often accompanies several other forms and documents to ensure compliance with state tax regulations. Here’s a brief overview of some of these commonly used documents.
- ST-4 Exempt Use Certificate: This form is used by purchasers who are claiming an exemption from sales tax for items that will be used in a specific manner that qualifies for exemption under New Jersey law.
- ST-5 Sales Tax Exempt Certificate: Nonprofit organizations and government entities use this certificate to purchase items without paying sales tax, as they are exempt from such taxes.
- ST-6 Direct Payment Certificate: This certificate allows certain purchasers to pay sales tax directly to the state instead of to the seller, streamlining the tax process for specific transactions.
- ST-8 Resale Certificate for Sales Tax: Similar to the ST-3, this form is specifically for sellers who are purchasing items for resale, ensuring they do not pay sales tax on those purchases.
- ST-13 Exempt Use Certificate for Utilities: This form is specifically for utility services, allowing certain users to claim an exemption from sales tax on their utility bills.
- ST-15 Sales Tax Exemption Certificate for Manufacturing: Manufacturers can use this document to purchase machinery and materials without incurring sales tax, provided the items are used in the manufacturing process.
- ST-16 Sales Tax Exemption Certificate for Agricultural Use: Farmers and agricultural producers use this certificate to purchase goods and services necessary for agricultural production without paying sales tax.
- ST-17 Sales Tax Exemption Certificate for Resale of Services: This form is used when a business provides services that are exempt from sales tax, allowing them to purchase necessary materials without incurring tax.
Understanding these forms can help businesses navigate the complexities of sales tax in New Jersey. Proper use of these documents not only ensures compliance but also protects businesses from potential tax liabilities.
Similar forms
The New Jersey ST-4 form, also known as the Sales Tax Exempt Use Certificate, is similar to the ST-3 form in that it serves to exempt certain transactions from sales tax. While the ST-3 form is specifically for resale purposes, the ST-4 form is used when a purchaser intends to use the property or service in a manner that qualifies for exemption under New Jersey tax law. For example, a nonprofit organization might use the ST-4 to purchase supplies without paying sales tax, provided they can demonstrate that the items will be used for exempt purposes. Both forms require the purchaser to provide specific information, including their tax identification number and the nature of their business, ensuring that sellers have the necessary documentation to support the tax-exempt status of the transaction.
The ST-5 form, known as the Sales Tax Exempt Organization Certificate, is another document that parallels the ST-3. This form is utilized by organizations that are recognized as tax-exempt under federal law, such as charities and educational institutions. When these organizations make purchases, they can present the ST-5 to avoid paying sales tax. Similar to the ST-3, the ST-5 requires the organization to provide their tax-exempt number and certify that the purchase is for exempt purposes. Both forms aim to facilitate tax compliance while allowing eligible entities to conduct their operations without the added burden of sales tax on necessary purchases.
The ST-6 form, known as the Sales Tax Exempt Resale Certificate for Direct Mail, is specifically designed for businesses that sell direct mail advertising. This form allows sellers to purchase materials for direct mail campaigns without incurring sales tax, as these materials will be resold as part of the advertising service. Like the ST-3, the ST-6 requires the seller to declare their intention to resell the items and provide relevant business information. Both forms highlight the importance of proper documentation to ensure that sales tax is only collected when required, thus protecting both buyers and sellers from potential tax liabilities.
The ST-8 form, or the Sales Tax Exempt Purchase Certificate for Government Entities, is used by government agencies when making purchases. This form allows government entities to acquire goods and services without paying sales tax, similar to how the ST-3 functions for resale transactions. Government agencies must present the ST-8 to sellers, who then retain it for their records. Both the ST-3 and ST-8 forms serve to clarify the tax-exempt status of certain purchases, ensuring that the sellers have the appropriate documentation to justify not collecting sales tax on these transactions.
Lastly, the ST-9 form, known as the Sales Tax Exempt Purchase Certificate for Nonprofit Organizations, is used by nonprofit entities to make tax-exempt purchases. This form is akin to the ST-3 in that it requires the purchaser to certify their nonprofit status and the nature of the items being purchased. Nonprofits must provide their tax-exempt number and other relevant details to the seller. Both the ST-3 and ST-9 forms are essential tools for ensuring compliance with sales tax regulations while allowing eligible organizations to operate without the financial burden of sales tax on necessary purchases.
Dos and Don'ts
When filling out the ST-3 New Jersey form, it is crucial to adhere to specific guidelines to ensure compliance and avoid issues. Below are five important dos and don'ts:
- Do provide your New Jersey Taxpayer Registration Number accurately.
- Do ensure that the form is fully completed before submitting it to the seller.
- Do retain a copy of the completed form for your records.
- Don't submit the form to the Division of Taxation; it is for the seller's records only.
- Don't forget to check the appropriate boxes that apply to your purchase type.
Following these guidelines will help facilitate a smooth transaction and maintain compliance with New Jersey tax regulations.
Misconceptions
Here are four common misconceptions about the ST-3 New Jersey form:
- Misconception 1: The ST-3 form can be used for any type of purchase.
- Misconception 2: Sellers can ignore the requirements of the ST-3 form.
- Misconception 3: The form does not need to be retained by the seller.
- Misconception 4: Any incomplete ST-3 form can still protect the seller from tax liability.
This is not true. The ST-3 form is specifically for purchases intended for resale or for use in a taxable service. If the items are for personal use, the exemption does not apply.
Sellers must collect sales tax unless they receive a fully completed ST-3 form. Failing to do so can lead to liability for unpaid taxes.
In fact, sellers must keep the ST-3 form for at least four years. It must be available for inspection if required.
This is incorrect. If the form is incomplete, the seller may still be liable for tax unless they obtain a fully completed form within a specific timeframe during an audit.
Key takeaways
- The ST-3 form is a Resale Certificate used in New Jersey for tax exemption purposes.
- Purchasers must provide a fully completed form to the seller to avoid paying sales tax on taxable property or services.
- The seller must retain the ST-3 form for at least four years from the date of the last sale covered by the certificate.
- Information required on the form includes the purchaser’s name, address, type of business, and tax identification number.
- Sellers are relieved of liability for tax collection if they accept a properly completed ST-3 form within 90 days of the sale.
- Improper use of the ST-3 form can lead to liability for unpaid taxes, so sellers should verify the purpose of the purchase.
- Private reproduction of the ST-3 form is allowed without prior permission from the Division of Taxation.