Telecommunications Companies That Must Register with the New Jersey Division of Taxation
Telecommunications companies that provide services are required to register with the appropriate tax authority, the New Jersey Division of Revenue and Enterprise Services. They are viewed as taxable goods and services. There is currently no cost associated with registering for a New Jersey Certificate of Authority.
The business must have a location within the State of New Jersey and employ workers within the state. Once the application is received, the New Jersey Certificate of Authority (Form CA-1) will be sent to the entity of record. Within the information received, the entity will also receive a tax identification number specific to the State of New Jersey. This number will appear on all pre-printed correspondence.
All tax exemption certificates issued by the entity must have this number. While most taxable goods have quarterly filings and payments, there is a certain threshold that will require a monthly payment. The criteria are as follows:
- Companies that have more than $30,000 in sales and use tax during the calendar year prior to reporting; and
- Companies that have more than $500 in the first or second months of the current calendar year.
Returns are required by the tax authority even if no tax is due. These taxes can be filed three ways: online, electronically, or by phone. Payments are due by the 20th at 11:59 p.m. after the filing period ends. The EZ File system only takes electronic payments of e-checks, EFT, or credit cards.
Taxes for out-of-state sales are not to be collected. There must be a record of the destination and method of delivery. Telephone services, pagers, cellular phones, and facsimile services are all subject to Sales Tax, as well as the equipment, maintenance, and repair. Answering services are also subjected to Sales Tax if they are received by a customer.
The Registration Process
- The process for telecommunications companies to register their entities is straightforward.
- Companies needing to register with the Division of Revenue must file form NJ-REG, the Business Registration Application at least 15 days prior to starting a new business or opening an additional location.
- The form can be filed online using Business Gateway Services.
- Corporations and other business entities have to file a public records document as well for goods and services to be sold and taxed.
Renewal for New Jersey Telecommunications Companies
No renewal is needed for the sales tax certificate, as this is a one-time registration. However, if there are changes within the business, or the location and other contact information have changed, the Division of Revenue and Enterprise Services must be notified. It is recommended that exemption certificates be requested from buyers on a periodic basis.
Telecom Tax Exemptions in New Jersey
There are certain tax exemptions allowed in New Jersey, but the seller accepting the certificate of tax exemption must be registered in the state. There are three different exemption certificates:
- Exempt Organization Certificate
- Exempt Use Certificate
- Resale Use Certificate
Certificates must be fully completed and documented.
There is only one certificate needed if the purchases are of the same type. The certificate must be kept for a period of four years after the last purchase on the certificate.
New Jersey is part of the Streamlined Sales and Use Tax Agreement (SSUTA) exemptions. Use Form ST-SST which is used and accepted by all designated member states. Businesses located in a designated Urban Enterprise Zone (UEZ) may be able to have a partial Sales Tax exemption.
How to File a Voluntary Disclosure Agreement in New Jersey
In New Jersey, individuals and business entities who have outstanding sales and state tax debt are offered a reprieve with the Voluntary Disclosure Agreement (VDA). In most cases, penalties are waived, the entity or individual can remain anonymous, and the look-back period for businesses is limited. This assists businesses that may run into trouble if they are audited. If a business is audited as part of an investigation, the look-back period may become unlimited.
To qualify for this program:
- The individual or entity must not have had any contact with the Division
- The entity must also be willing to register for the tax they are reporting via form NJ-REG
- A Public Records filing may also be required
- Additional requirements include not being under criminal investigation, filing any returns requested, and paying any outstanding liabilities on time
If an entity does not meet the minimum look-back period under the requirements, the Division will not grant the Voluntary Disclosure Agreement. As a rule of thumb, annual returns being filed have a look-back period of four years, which includes the three previous years and the present year. Quarterly returns have a look-back of four years at minimum, which amounts to 16 quarters.
Conquer New Jersey Telecom Tax Requirements Once and For All
For help registering, reporting, recording, or the management of the New Jersey Telecom Tax process, contact the team at FAStek.
Our experienced agents have worked with many telecommunications companies in New Jersey, and have the expertise to help you conquer communications tax once and for all.