New Jersey Administrative Code › Title 18 - TREASURY - TAXATION › Chapter 24 - SALES AND USE TAX ACT › Subchapter 10 - ISSUANCE AND ACCEPTANCE OF EXEMPTION CERTIFICATES › Section 18:24-10.5 - Exemption certificates; conditions, retention, and inspection; use of resale certificates by out-of-State sellers

Current through Register Vol. 56, No. 14, July 15, 2024
(a) All certificates,
				whether single purchase or blanket, accepted by a seller as a basis for exemption
				from any tax imposed by the Sales and Use Tax Act (54:32B-1 et seq.) shall be retained by
				the seller for a period of not less than four years from the date of the last use of
				such certificate as a basis for exemption.
(b) Whenever the sale for resale exemption is
				claimed by an unregistered out-of-State seller, either the fully completed resale
				certificate of another state, or a Division-approved multi-jurisdictional resale
				certificate, or the Streamlined Sales and Use Tax Agreement Certificate of Exemption
				- New Jersey (Form ST-SST), including evidence that the purchaser is a licensed
				seller in one or more jurisdictions, accepted by the seller, is deemed evidence of
				exemption, unless: the person to whom the sale was made and who issued the
				certificate was required to be registered in New Jersey under
				54:32B-2(i)  at the
				time of sale, or the person to whom the sale was made took delivery of the property
				at the sale location in New Jersey. If the person to whom the sale was made was not
				required to be registered in New Jersey at the time of sale, and in fact was not
				registered, but did take delivery of the tangible personal property at the sale
				location in New Jersey, the acceptable evidence of exemption is a New Jersey Resale
				Certificate for Non-New Jersey Sellers (Form ST-3NR) or other approved
				form.
(c) The seller shall obtain the
				same information for proof of a claimed exemption regardless of the medium in which
				the transaction occurred.
(d) The seller
				shall maintain proper records of exempt transactions and provide them to the
				Division when requested.
(e) In the case
				of drop-shipment sales, the Division will allow a third-party seller (for example,
				drop shipper) to claim a resale exemption based on an exemption certificate provided
				by its customer/reseller or any other acceptable information available to the
				third-party seller evidencing qualification for a resale exemption, regardless of
				whether the customer/reseller is registered to collect and remit sales and use tax
				in the state where the sale is sourced.
(f) The Division shall relieve sellers that follow
				the requirements of
				18:24-10.4 from the tax otherwise
				applicable if it is determined that the purchaser improperly claimed an exemption
				and will hold the purchaser liable for the nonpayment of tax. This relief from
				liability does not apply to a seller who fraudulently fails to collect tax, a seller
				who solicits purchasers to participate in the unlawful claim of an exemption, or a
				seller who accepts an exemption certificate when the purchaser claims an
				entity-based exemption when:
1. The subject of the
				transaction sought to be covered by the exemption certificate is actually received
				by the purchaser at a location operated by the seller; and
2. New Jersey has indicated on the Streamlined
				Sales and Use Tax Agreement Certificate of Exemption - New Jersey (Form ST-SST),
				that the claimed exemption is unavailable.