New Jersey has a law requiring online marketplaces to collect sales tax on third-party sellers’ sales. Marketplace facilitators (such as Amazon, Etsy, and eBay) are responsible for collecting and remitting sales tax on behalf of sellers using their platforms.
Like in many states, sales made via marketplaces still count toward the seller’s New Jersey economic nexus threshold. If you, as a seller, are below the economic nexus threshold, you generally do not need to register for a New Jersey sales tax permit or collect/remit tax yourself on marketplace sales. However, the marketplace facilitator will still be required to collect and remit sales tax on those transactions. This is because New Jersey law requires the marketplace facilitator to collect and remit the sales tax on all marketplace-facilitated transactions delivered into the state. This applies regardless of whether the individual seller is above or below the economic nexus threshold.
However, marketplace sales still count toward the seller’s threshold calculation. If total sales (including marketplace sales) exceed the threshold, the seller will need to register for a New Jersey sales tax permit. However, the marketplace facilitator may continue to collect and remit the tax on your behalf. You can request to be placed on a non-reporting basis (using Form C-6205-ST) to avoid filing regular New Jersey sales tax returns.
Let’s understand the above through a simple example.
Example: Consider a German company that sells consumer electronics on Amazon to customers in New Jersey. If the foreign company remains under the economic threshold, it generally does not need to register for a New Jersey sales tax permit or collect/remit tax itself on marketplace sales. However, because Amazon is a marketplace facilitator, it may still be required to collect and remit New Jersey sales tax on the sales made through its platform. Amazon’s obligation to collect and remit sales tax applies independently of whether the German company has established economic nexus with New Jersey.
Next, let’s understand which products and services are taxable or exempt in New Jersey.