New Jersey economic nexus rules require remote sellers to collect sales tax once they exceed $100,000 in sales or complete 200 transactions in the state. For e-commerce businesses expanding into the Northeast, understanding when you’ve triggered nexus determines whether you must register, collect, and remit sales tax, or risk penalties.
After the 2018 Wayfair decision, states gained authority to require out-of-state sellers to collect sales tax based on economic activity alone. New Jersey implemented its economic nexus law quickly. Today, it remains one of the most straightforward thresholds in the country. Though “straightforward” doesn’t mean simple.
That’s where Hands Off Sales Tax (HOST) comes in. With over 25 years focused exclusively on sales tax compliance, we help e-commerce sellers determine exactly where they have nexus obligations, register in required states, and manage filings so you can focus on growth instead of tax codes.
What Is Economic Nexus in New Jersey?
Economic nexus establishes a state’s right to require sales tax collection based on economic activity within that state, regardless of physical presence. Before Wayfair, only businesses with physical locations, employees, or inventory in a state had to collect sales tax there.
The Supreme Court’s Wayfair decision changed everything. States can now impose collection obligations on remote sellers who exceed specific revenue or transaction thresholds.
New Jersey adopted economic nexus effective November 1, 2018. The state requires remote sellers to collect and remit sales tax if they meet either threshold during the current or prior calendar year:
- $100,000 in gross revenue from sales delivered into New Jersey, or
- 200 or more separate transactions delivered into New Jersey
Both thresholds apply to the current or previous calendar year. If you exceeded either threshold in 2024, you must collect tax in 2025. If you exceed the threshold in 2025, collection obligations begin immediately.
⚠️ Legislative Update: Senate Bill 3604, expected to pass in 2025, will eliminate the 200-transaction threshold entirely. Once enacted, only the $100,000 sales threshold will determine economic nexus. Monitor the bill’s status, as this change simplifies compliance for high-transaction, low-revenue sellers.
How the Thresholds Work
Gross revenue includes all sales of tangible personal property and taxable services delivered to New Jersey customers. This means retail sales of physical products shipped to New Jersey addresses, digital products classified as taxable, and taxable services provided to New Jersey customers.
The 200-transaction threshold counts each completed sale as one transaction. A customer buying three items in separate orders generates three transactions. A customer buying ten items in one order generates one transaction.
New Jersey measures thresholds based on either the current calendar year or the preceding calendar year. This rolling lookback creates ongoing monitoring obligations. If you reached $100,000 in sales during 2024, you must collect tax throughout 2025, even if 2025 sales stay below the threshold.
Marketplace Sales Don’t Count Toward Your Threshold
New Jersey’s marketplace facilitator law requires platforms like Amazon, eBay, and Etsy to collect sales tax on behalf of third-party sellers. Sales made through marketplace facilitators generally don’t count toward your economic nexus threshold for direct-to-consumer sales obligations.
If you sell $150,000 through Amazon (marketplace handles tax) and $80,000 through your Shopify store, your $80,000 in direct sales doesn’t trigger nexus. However, if your Shopify sales reach $100,000, you must register and collect tax on those direct sales.
Registration Requirements
Once New Jersey economic nexus thresholds are exceeded, registration with the New Jersey Division of Taxation becomes mandatory before collecting tax.
How to Register
Register online through the New Jersey Business Gateway Services portal. You’ll need your Federal Employer Identification Number (FEIN), business legal name, physical business address, estimated monthly sales volume in New Jersey, and bank account information for electronic filing and payment.
New Jersey issues a Certificate of Authority containing your sales tax registration number. Registration typically processes within 1-2 weeks for straightforward applications.
HOST handles New Jersey sales tax registration as part of our comprehensive compliance services, managing paperwork, follow-up communications, and state requirements so you can begin collecting immediately.
When to Begin Collecting
Collection obligations begin once you exceed the threshold. New Jersey doesn’t provide a grace period so the obligation starts when the threshold is crossed.
Register as soon as you determine you’ve met the threshold and begin collecting on all subsequent sales. Retroactive collection on past sales isn’t feasible, but prompt registration demonstrates good faith compliance.
If you discover you exceeded the threshold months ago and haven’t been collecting, consider a Voluntary Disclosure Agreement (VDA). HOST’s VDA services help resolve past liabilities while limiting lookback periods and abating penalties.
New Jersey Sales Tax Rates
New Jersey imposes a statewide sales tax rate of 6.625% on most tangible personal property and certain services. Unlike many states, New Jersey has no local sales taxes, which simplifies rate calculation significantly.
Every taxable sale in New Jersey is subject to the same 6.625% rate regardless of whether the customer is in Newark, Princeton, or Cape May. This uniformity eliminates the address-level rate lookup complexity present in states with thousands of local jurisdictions.
What’s Exempt?
New Jersey exempts several categories:
- Most groceries and food for home consumption
- Prescription and over-the-counter drugs
- Clothing and footwear (with limited exceptions)
- Residential heating fuels and utilities
- Manufacturing equipment and machinery
Prepared food sold by restaurants is taxable. Digital products and SaaS have specific rules, and some are taxable while others remain exempt depending on delivery method and use.
Understanding what’s taxable versus exempt prevents overcharging customers or undercharging (which leaves you liable during audits).
HOST’s nexus analysis and consultation services help clarify product taxability in New Jersey, ensuring you collect correctly from day one.
Filing Frequencies and Deadlines
Once registered, New Jersey assigns a filing frequency based on your expected tax liability:
- Monthly filers: Over $30,000 in annual New Jersey sales tax liability
- Quarterly filers: $1,200 to $30,000 in annual tax liability
- Annual filers: Under $1,200 in annual tax liability
Returns and payments are due on the 20th of the month following the reporting period. Monthly returns for January sales are due February 20. If the 20th falls on a weekend or holiday, the deadline extends to the next business day.
Penalties for Non-Compliance
New Jersey assesses penalties for late filing and payment:
- Late filing penalty: 5% of tax due per month, up to 25% maximum
- Late payment penalty: 5% of unpaid tax after 30 days
- Interest: Compounds daily on unpaid balances
Non-registration after exceeding economic nexus thresholds creates significant liability exposure. The state can assess back taxes, penalties, and interest for up to four years.
Proactive compliance eliminates these risks. HOST’s filing services ensure returns are prepared accurately and submitted on time across all jurisdictions, including New Jersey.
Common Challenges for Remote Sellers
Tracking Thresholds Across Multiple States
Most e-commerce sellers don’t just worry about New Jersey. You’re simultaneously monitoring thresholds in 45+ states, each with different rules, measurement periods, and requirements.
Manual tracking creates errors. Spreadsheets become outdated. Thresholds get missed until a notice arrives.
HOST’s comprehensive nexus analysis continuously monitors your sales footprint across all states, identifying exactly where you’ve triggered obligations.
Managing Product Taxability
New Jersey’s clothing exemption seems simple until you encounter edge cases. Digital products create similar confusion. Misclassifying products leads to either overcharging customers or undercharging (leaving you liable during audits).
Software Configuration Errors
Sales tax automation platforms like TaxJar and Avalara calculate tax at checkout, but only if properly configured. Common errors include treating exempt items as taxable, applying tax to wholesale transactions, double-taxing due to system overlaps, and failing to update exemption certificates.
HOST offers a free sales tax software review to identify configuration errors before they impact your bottom line.
How HOST Simplifies Compliance
Managing New Jersey economic nexus and ongoing compliance obligations diverts time and resources from growing your business. Every hour spent researching tax rules or responding to notices is an hour not spent on marketing, product development, or customer service.
What HOST Delivers
Nexus Analysis: We analyze your sales data to determine exactly where you’ve triggered economic nexus across all states, including New Jersey.
Sales Tax Registration: We handle New Jersey registration (and all other required states), completing paperwork and securing your Certificate of Authority.
Ongoing Filing Services: We prepare and file your New Jersey returns monthly, quarterly, or annually, calculating tax due and ensuring timely submission.
Notice Management: If New Jersey sends a confusing notice, we interpret it, determine the appropriate response, and handle communications.
Audit Defense: Should New Jersey audit your compliance, we organize documentation, communicate with auditors, and defend your position to minimize liability.
Voluntary Disclosure Agreements: If you discover past non-compliance, we file VDAs to limit lookback periods, reduce penalties, and resolve liabilities efficiently.
Software Review: We review your TaxJar, Avalara, or other automation tools to identify configuration errors.
Founded in 1999, HOST has focused exclusively on sales tax for over 25 years. We bring enterprise expertise to small and medium-sized e-commerce businesses navigating multi-state compliance challenges.
Ready to Get Compliant?
New Jersey economic nexus obligations begin the moment you cross $100,000 in sales or 200 transactions. Delaying registration creates liability exposure, and that’s back taxes, penalties, and interest compounding while you wait.
Whether you’re crossing thresholds for the first time, expanding into multiple states, or discovering past obligations, professional guidance eliminates guesswork and prevents costly mistakes.
At HOST, we combine deep technical expertise with transparent communication and personalized support. You’ll always know where you stand, what needs to happen next, and how we’re protecting your business.
Contact us today to discuss your New Jersey sales tax needs. Schedule a free consultation or get our “10 Sales Tax Mistakes E-Commerce Sellers Make” e-book to learn more.
Frequently Asked Questions
What is the economic nexus threshold for New Jersey?
New Jersey economic nexus triggers at $100,000 in gross revenue or 200 separate transactions delivered into the state during the current or prior calendar year. Exceeding either threshold creates sales tax collection obligations.
Do sales through Amazon count toward my New Jersey nexus threshold?
Generally no. Sales made through marketplace facilitators like Amazon don’t count toward your economic nexus threshold because the platform handles tax collection. However, direct sales through your own website count separately and may trigger independent nexus obligations.
When must I register after exceeding New Jersey’s threshold?
Registration should occur immediately after determining you’ve exceeded the threshold. New Jersey doesn’t provide a grace period. Collection obligations begin when the threshold is crossed.
What is New Jersey’s sales tax rate?
New Jersey imposes a statewide sales tax rate of 6.625% with no local taxes. This uniform rate applies to all taxable sales throughout the state.
How often do I need to file New Jersey sales tax returns?
Filing frequency depends on your annual tax liability: monthly for over $30,000 in tax, quarterly for $1,200-$30,000, and annually for under $1,200. Returns are due on the 20th of the month following the reporting period.
What happens if I don’t register after exceeding the threshold?
Non-registration creates significant liability exposure. New Jersey can assess back taxes for up to four years, plus penalties of up to 25% and compounding daily interest. Proactive compliance eliminates these risks.
