T

New Jersey Division of Taxation Sales Tax Exemption Administration

AX Sales Tax Exemption

OPIC Administration
Bulletin S&U-6
Introduction NJ Exemption Certificates
The New Jersey Sales and Use Tax Act (the Under New Jersey law, some items are exempt
“Act”) imposes a tax of 7% on the receipts from from sales and use tax regardless of who buys
every retail sale of tangible personal property them or how they are used. Examples of exempt
and some services (except as otherwise provided items include most clothing, most items of food
in the Act). Under certain conditions, exemp- and drink (except when sold in or by restaurants
tions are provided for otherwise taxable trans- or similar establishments) and prescription drugs.
actions. This bulletin explains the proper com- There are however, items which are exempt
pletion and use of the following New Jersey from tax only under certain conditions. The New
exemption certificates used to make qualified Jersey Division of Taxation issues several ex-
exempt purchases: emption certificates which allow qualified indi-
Form ST-3 Resale Certificate viduals and businesses to purchase taxable mer-
chandise and services tax-free. Each exemption
Form ST-3NR Resale Certificate for Non-New
Jersey Vendors certificate has its own specific use. In addition,
Form ST-4 Exempt Use Certificate New Jersey sellers and purchasers may accept
and issue the Streamlined Sales and Use Tax
Form ST-5 Exempt Organization
Certificate Certificates of Exemption (ST-SST) in lieu of
Form ST-6A Direct Payment Certificate the exemption certificates issued by the
Division.
Form ST-7 Farmer’s Exemption Certificate
Form ST-8 Certificate of Capital Agencies of the Federal government and the
Improvement United Nations as well as the State of New Jer-
Form ST-10 Motor Vehicle Sales and Use sey and its political subdivisions are exempt
Tax Exemption Report from paying sales tax provided the agency mak-
Form ST-10-A Aircraft Dealer Sales and Use ing the purchase supplies the seller with a copy
Tax Exemption Report of a valid purchase order or contract signed by
Form ST-10V Vessel Dealer Sales and Use an authorized official. See page 14 for further
Tax Exemption Report information.
Form ST-13 Contractor’s Exempt Purchase
Certificate
Form ST-16 Exemption Certificate for
Registration
Student Textbooks
New Jersey Registration
Any person or organization engaged in selling
Form UZ-4 Contractor’s Exempt Purchase
taxable goods or services in this State must reg-
Certificate - Urban Enterprise
ister with the State for sales tax purposes by fil-
Zone
ing a business registration application (Form
Form UZ-5-SB Urban Enterprise Zone Exempt NJ-REG) at least 15 business days before
Purchase Certificate

Rev. 1/95
Rev. 9/06 1
Bulletin S&U-6

starting operations or opening an additional can be used as an alternative to the traditional

place of business in this State. If your registration system currently available through
application indicates that you will collect sales the Division of Revenue’s Web site. Registering
tax or purchase items for resale, you will be sent through this central system is voluntary, unless
a New Jersey Certificate of Authority (Form the seller seeks to take advantage of the amnesty
CA-1) for sales tax. This certificate is your program (see links below). Central registration
authorization from the State of New Jersey to constitutes registration with every state that is a
collect sales tax and to issue or accept exemp- member of the Streamlined Sales and Use
tion certificates. Tax Project, including those that adopt the
agreement after the seller registers. By regis-
The Certificate of Authority will bear your as- tering through this system, sellers agree to
signed New Jersey tax identification number, collect and remit tax on all sales sourced to
which is usually based on your Federal each member state.
employer identification number (FEIN). Your
New Jersey tax identification number will Sellers that register through the central system
appear on all preprinted forms sent to you by the have the option of choosing between three
State. You must include your tax identification methods of calculating, reporting, and remitting
number on all exemption certificates you issue. the tax. These methods involve the selection of
a certified service provider (CSP), a certified
A Public Records Filing may also be required
automated system (CAS), or using the seller’s
depending upon the type of business ownership.
own proprietary system. Sellers may also report
More information is available in the New Jersey
and remit based on traditional means, but there
Complete Business Registration Package
are benefits to utilizing one of the other systems
(NJ REG) or by calling 609-292-6400.
that will not be available for traditional systems.
Form NJ-REG may be filed online from the Privacy and confidentiality protections are also
Division of Revenue’s New Jersey Business addressed.
Gateway Services Web site at: [Link]/
Additional information concerning the central
njbgs/. The Public Records Filing required for
registration system, the identification and
certain businesses may also be completed online
certification of CSPs and CASs, and other
at the Business Gateway Service’s Web site.
administrative simplifications is available at:
(There is a fee associated with the Public
[Link]/
Records Filing.)
The central registration system may be accessed
Streamlined Sales Tax Central on the Division’s Web site at:
Registration [Link]/treasury/taxation/
The central online registration system developed [Link]
by the Streamlined Sales and Use Tax Project

2 Rev. 9/06
 Sales Tax Exemption Administration

Issuing and Accepting A single exemption certificate may cover addi-

tional purchases of the same general type of
Exemption Certificates property by the same purchaser from the same
Generally, both the purchaser issuing an ex-
vendor.
emption certificate and the seller accepting it
must be registered with New Jersey. However, Streamlined Certificate of Exemption
nonregistered purchasers may also issue (ST-SST)
exemption certificates. The following provisions apply when a
purchaser claims an exemption:
New Jersey Exemption Certificates
The purchaser must fill out the exemption 1. The seller shall obtain identifying information
certificate completely, providing the purchaser’s of the purchaser and the reason for claiming a
New Jersey tax identification number, the name tax exemption at the time of the purchase.
and address of the seller, and any other informa- 2. A purchaser is not required to provide a
tion specified on the form. Nonregistered signature to claim an exemption from tax
purchasers issuing exemption certificates must unless a paper exemption certificate is used.
provide one of the following in lieu of a New
3. The seller shall use the standard format for
Jersey tax identification number:
claiming an exemption electronically, once
1. Federal employer identification number of the such format is adopted by the governing
business board.
2. Out-of-State registration number 4. The seller shall obtain the same information
Nonregistered purchasers may issue any of the for proof of a claimed exemption regardless
following exemption certificates: of the medium in which the transaction
occurred.
ST-3NR Resale Certificate for Non-New Jersey
Vendors 5. The seller shall maintain proper records of
exempt transactions and provide them to the
ST-4 Exempt Use Certificate State when requested.
ST-7 Farmer’s Exemption Certificate 6. Use-based and entity-based exemptions will
ST-8 Certificate of Capital Improvement be administered through a direct pay permit,
ST-16 Exemption Certificate for Student an exemption certificate, or another means
Textbooks that does not burden sellers.

However, the New Jersey seller accepting an The State shall relieve sellers that follow these
exemption certificate must always be registered requirements from any tax otherwise applicable
with New Jersey. if it is determined that the purchaser improperly
claimed an exemption and to hold the purchaser

Rev. 9/06 3
Bulletin S&U-6

liable for the nonpayment of tax. This relief Correcting Certificates

from liability does not apply to a seller who Businesses have up to ninety (90) days after the
fraudulently fails to collect the tax or solicits sale is completed to obtain a corrected certifi-
purchasers to participate in the unlawful claim cate if the original exemption certificate lacked
of an exemption. some necessary information, or if the informa-
tion was incorrectly stated.
Good Faith
To act in good faith means to act in accordance Retaining Certificates
with standards of honesty. In general, registered Certificates must be retained by the seller for at
sellers who accept exemption certificates in least four (4) years from the date of the last
good faith are relieved of liability for the collec- transaction covered by the certificate. Certifi-
tion and payment of sales tax on the transaction cates must be in the physical possession of the
covered by the exemption certificate. seller and available for inspection by the Divi-
sion of Taxation.
In order for good faith to be established, the
following conditions must be met: Out-of-State Sales
• Certificate must be an official form or a A business that sells taxable items to customers
proper and substantive reproduction; in another state and delivers the items sold out of
• Certificate must be filled out completely and State to the purchaser does not collect New
correctly; and Jersey sales tax. The seller’s records should
show the out-of-State destination point and the
• Certificate must be dated and include the pur-
seller should keep evidence of the method of
chaser’s New Jersey tax identification number
delivery to that location such as parcel post
or, for a nonregistered purchaser, the Federal
receipts, bills of lading, etc. For more informa-
employer identification number or out-of-
tion on out-of-State sales, request ANJ-10, Out-
State registration number.
of-State Sales & New Jersey Sales Tax.
Improper Certificates
Unless all the good faith conditions are met, the Sales are subject to New Jersey sales tax if the
seller may not accept the exemption certificate out-of-State customer takes delivery or posses-
and must collect sales tax from the purchaser sion of the items sold in this State at the time of
instead. Sales transactions which are not sup- purchase. However, if it is a purchase for resale,
ported by properly executed exemption certifi- an out-of-State purchaser that is registered with
cates are considered taxable sales. The burden New Jersey may issue a New Jersey Resale
of proof that tax was not required to be collected Certificate (Form ST-3) and not pay sales tax.
is on the seller. A qualified out-of-State vendor may also make
tax-exempt purchases in New Jersey of goods
and services purchased for resale. See Resale

4 Rev. 9/06
 Sales Tax Exemption Administration

Certificate (Form ST-3) below and Resale When items purchased with a resale certificate
Certificate for Non-New Jersey Vendors (Form are taken out of inventory for personal use, the
ST-3NR) on page 8. business owner must pay New Jersey use tax on
the items that are not resold. Use tax is com-
Using Exemption Certificates puted on the purchase price of the items at the
Resale Certificate (Form ST-3) current sales tax rate. For more information on
Form ST-3 is used by registered sellers to pur- use tax liabilities, request ANJ-7, Use Tax in
chase tangible personal property either for resale New Jersey.
in its present form or for incorporation into Inventory for resale does not include supplies
other property held for sale. When purchasing and materials purchased by contractors. A con-
goods or services, a retailer or wholesaler issues tractor is someone who works on the land and/
Form ST-3 to the wholesaler or manufacturer. or buildings of another. Contractors (e.g., build-
This exempts the retailer or wholesaler from the ers, landscapers) must always pay sales tax on
sales tax on the purchase. Sales tax is collected the materials and supplies they purchase unless
when these items are sold at retail. New Jersey the property being worked on belongs to a quali-
registered businesses may issue Form ST-3 fied exempt organization, a qualified urban enter-
when purchasing the following: prise zone business, or a qualified housing spon-
• Inventory intended for resale, rent or lease sor. See Contractor’s Exempt Purchase Certifi-
cate (Form ST-13) on page 16 and Contractor’s
Example
Exempt Purchase Certificate - Urban Enterprise
Ron, of Ron’s Toy Store, purchases an inven- Zone (Form UZ-4) on page 18 for additional
tory of dolls to sell on a retail basis. Ron is- information.
sues the doll manufacturer a resale certificate
instead of paying sales tax. NOTE: Fabricator/contractors (i.e., those who
Ron also needs display cases for the dolls. He build, sell, and install items such as
may not use a resale certificate when purchas- cabinets or heating ducts which be-
ing the display cases because they are not come component parts of real proper-
intended for resale. He must pay sales tax on ty) and floor covering dealers follow
the display cases. special rules for paying sales tax on
materials and supplies.
Example
Allen, of Appliance Rentals, Inc., purchases Additional information for contractors, includ-
inventory to rent on a retail basis. He issues ing fabricator/contractors and floor covering
his supplier Form ST-3 and does not pay sales dealers, is contained in Tax Topic Bulletin
tax on the purchases. Allen will collect sales S&U-3, Contractors and New Jersey Taxes,
tax from his customers each time they rent an ANJ-4, Landscapers & New Jersey Sales Tax,
appliance from him. and ANJ-5, Floor Covering Dealers.

Rev. 9/06 5
Bulletin S&U-6

• Raw Materials which will become compo- car to a transmission specialist (Ace Trans-
nent parts of the finished product mission Repairs) who completes the work and
returns the car to Tom’s Gas Station. Tom
Example
may issue a resale certificate to the transmis-
Midge, a silversmith, purchases silver to
sion specialist and pay no sales tax when he
make jewelry. She may issue her supplier
pays for the parts and services. When Tom
Form ST-3 and pay no sales tax since the
bills his customer, he must charge sales tax
silver becomes part of the jewelry she is
on the total bill (i.e., the charges for both
producing for resale.
parts and labor).
When Midge purchases tools for her business,
If Tom has the garage’s hydraulic lifts re-
she may not use a resale certificate since the
paired, he may not issue a resale certificate to
tools do not become a component part of her
the repairman since the service rendered will
finished product. She must pay sales tax on
not be resold. Tom must pay sales tax on the
the tools.
price of the repair.
• Services for resale
See page 7 for an illustration of how Tom will
Example complete the Form ST-3 Resale Certificate he
Tom’s Gas Station is unable to complete all issued for the repair services purchased from
the repairs to a customer’s car. Tom sends the Ace Transmission Repairs.

6 Rev. 9/06
 Sales Tax Exemption Administration

ST-3 (11-99, R-10) State of New Jersey

DIVISION OF TAXATION
The seller must collect the tax on a SALES TAX PURCHASER'S NEW JERSEY
sale of taxable property or services CERTIFICATE OF AUTHORITY NUMBER
unless the purchaser gives him a
properly completed New Jersey FORM ST-3
exemption certificate. 222-678-901/000
RESALE CERTIFICATE
To be completed by purchaser and given to and retained by seller. See instructions on back.
Seller should read and comply with the instructions given on both sides of an exemption certificate.

TO Ace Transmission Repairs Date 5/21/06

(Name of Seller)

163 Holland Ave. Budd Lake NJ 07828

Address City State Zip

The undersigned certifies that:

(1) He holds a valid Certificate of Authority (number shown above) to collect State of New Jersey Sales and Use Tax.
(2) He is principally engaged in the sale of (indicate nature of merchandise or service sold):

Motor fuels, supplies, and auto repairs

(3) The merchandise or services being herein purchased are described as follows:

Transmission repairs

(4) The merchandise described in (3) above is being purchased: (check one or more of the blocks which apply)
(a) ! For resale in its present form.
(b) ! For resale as converted into or as a component part of a product produced by the undersigned.
(c) ! For use in the performance of a taxable service on personal property, where the property which is the
subject of this Certificate becomes part of the property being serviced or is later transferred to the
purchaser of the service in conjunction with the performance of the service.
(5) The services described in (3) above are being purchased: (check the block which applies)
(a) ⌧ By a vendor who will either collect the tax or will resell the services.
(b) ! 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.
Tom’s Gas Station, Inc.
NAME OF PURCHASER (as registered with the New Jersey Division of Taxation)

16 Beverly Dr., Budd Lake, NJ 07828

(Address of Purchaser)

By Thomas Abbott President

(Signature of owner, partner, officer of corporation, etc.) (Title)

Rev. 9/06 7
Bulletin S&U-6

Resale Certificate for Non-New Jersey acceptable proof of exemption from sales tax
Vendors (Form ST-3NR) when making cash purchases of $150 or less
Form ST-3NR is used by qualified out-of-State instead of an official purchase order or contract.
vendors to make tax-exempt purchases in New See Exempt Organization Certificate
Jersey of goods or services purchased for resale. (Form ST-5) on page 14.
“Qualified out-of-State vendors” are vendors • Advertising for Use Out of State:
that (1) are not registered with New Jersey, See Direct-Mail Advertising for Use Out of
(2) are not required to be registered with New State on page 9.
Jersey, and (3) are registered with another state.
When a qualified out-of-State vendor carries the • Certain Aircraft: (a) Aircraft used by an air
goods away with him from the point of sale, or carrier as defined by the Civil Aeronautics
sends his own vehicle or messenger to pick Board or the Code of Federal Regulations
them up in New Jersey, the qualified out-of- having its principal place of operations within
State vendor may use the Resale Certificate for New Jersey and engaging in interstate,
Non-New Jersey Vendors (Form ST-3NR). The foreign, or intrastate air commerce. Repairs to
ST-3NR requires the person picking up the mer- such aircraft, including the installation of
chandise to provide acceptable identification equipment or machinery and replacement
(i.e., driver’s license of any state in the United parts and labor therefor, are also exempt. (b)
States, major credit card including photograph, Repairs to aircraft having a maximum takeoff
or any identification card which includes a num- weight of 6,000 pounds or more as certified
ber and a photograph and the bearer’s address). by the Federal Aviation Administration,
including machinery or equipment installed
Qualified out-of-State vendors may also use on such aircraft and replacement parts
Form ST-3NR for drop-shipment sales in New therefor. However, the exemption does not
Jersey. See Issuing and Accepting Exemption extend to purchases of this class of aircraft.
Certificates on page 3.
• Certain Buses: Bus companies whose rates
Exempt Use Certificate (Form ST-4) are regulated by the Interstate Commerce
Form ST-4 makes it possible for businesses to Commission or the Department of Transpor-
purchase production machinery, packaging tation may purchase buses for public passenger
supplies, and other goods or services without transportation with Form ST-4. This ex-
paying sales tax if the way they intend to use emption also applies to buses purchased by
these items is specifically exempt under New common or contract carriers who transport
Jersey law. The exemption does not apply to children to and from school. Repair and
services performed on the property, except as replacement parts for qualified buses as well as
otherwise noted. labor charges associated with such repairs are
also entitled to exemption.
In addition to the following qualified purchases,
• Certain Chemicals and Catalysts:
Form ST-4 may also be used by the Federal
Materials used to induce chemical or refining
government, the United Nations, the State of
processes in which the materials are an essen-
New Jersey and any of their agencies as

8 Rev. 9/06
 Sales Tax Exemption Administration

tial part of the process but do not become part Example

of the finished product. Fred is a commercial trucker. He operates a
• Commercial Fishing Boats: Certain boats, vehicle which is registered in Pennsylvania
including commercial party boats (headboats) and has a gross vehicle weight rating in excess
engaged in sport fishing and subject to annual of 26,000 pounds. When Fred has repairs
inspection by the U.S. Coast Guard, and ves- made in New Jersey, he may give his
sels primarily engaged in commercial fishing mechanic an exempt use certificate instead of
or shellfishing. Also exempt are charges for paying sales tax on the parts. Sales tax must be
repairs, alterations, reoutfitting of boats, fuel, paid on the charges for labor. As a qualified
maintenance, and charges for supplies (other nonregistered purchaser, Fred will enter his
than articles purchased for the original equip- FEIN or out-of-State registration number on
ping of a new ship). Equipment necessary for Form ST-4. When Fred buys motor oil for his
harvesting fish and shellfish may also be pur- truck, he may not issue an exempt use certi-
chased with Form ST-4. ficate. Motor oil is a supply, and sales tax must
be paid at the time of purchase.
• Commercial Motor Vehicles: The purchase,
rental, or lease of commercial trucks, tractors, • Commercial Printing: Machinery and equip-
trailers, and vehicles used in combination ment used by businesses engaged in commer-
with such, which are registered as required by cial printing, publishing of periodicals, books,
New Jersey law and have a gross vehicle business forms, greeting cards, or miscellane-
weight rating of more than 26,000 pounds or ous publishing, typesetting, photoengraving,
are operated exclusively for the carriage of electrotyping, stereotyping, and lithographic
interstate freight pursuant to Federal law are platemaking, including supplies.
exempt from tax. Repair parts and replace- • Communications: Telephones, telephone
ment parts are also exempt. The exemption lines, cables, central office equipment, or
also applies to trucks, trailers, and truck- station apparatus, or other machinery or
trailer combinations that are used directly and equipment, including comparable telegraph
exclusively in the production for sale of tan- equipment sold to a service provider subject
gible personal property on farms when the to the jurisdiction of the Board of Public
vehicles have a gross vehicle weight rating in Utilities or the Federal Communications
excess of 18,000 pounds and are registered Commission, for use directly and primarily in
with the New Jersey Division of Motor Vehi- receiving at destination or initiating, transmit-
cles for farm use. A New Jersey Exempt Use ting, and switching telephone, telegraph, or
Certificate, Form ST-4, should be issued to interactive telecommunications service for
the seller at the time of purchase. The sale to the general public.
purchaser is not required to be registered with • Direct-Mail Advertising for Use Out of
the State to issue Form ST-4 for the purchase State: Direct mail prepared within or outside
of commercial motor vehicles. of New Jersey by a New Jersey direct-mail
advertising or promotional firm for

Rev. 9/06 9
Bulletin S&U-6

distribution out of State. The exemption direct mail was shipped to a location outside
applies to charges for printing or production New Jersey.
of direct mail whether prepared in New Jersey • Certain Broadcasting Equipment:
or shipped into this State after preparation Machinery, apparatus, or equipment used di-
and stored for subsequent shipment to out-of- rectly and primarily in the production or
State customers. The exemption also applies transmission of radio or television broadcasts
to direct-mail processing services performed by commercial broadcasters operating under a
in connection with the distribution of direct broadcasting license issued by the Federal
mail to out-of-State recipients. Direct-mail Communications Commission or by providers
processing services include, but are not lim- of cable/satellite television program services.
ited to, preparing and maintaining mailing The exemption also applies to parts with a
lists, addressing, separating, folding, insert- useful life of more than one year. Equipment
ing, sorting, and packaging direct mail. used in the construction or operation of
Example towers does not qualify for the exemption.
The A-1 advertising agency, located in • Film/Video Production: Tangible personal
Trenton, New Jersey, produced a brochure property used directly and primarily in the
promoting the products of the Smooth-Touch production of film or video for sale including
Leather Company of Langhorne, Pennsylvania. motor vehicles, replacement parts (without
A-1 also packaged, labeled, sorted, and mailed regard to useful life), tools, and supplies.
the brochure to prospective customers whose Charges for installing, maintaining, servicing,
names were selected from a mailing list pre- or repairing such property are also exempt.
pared and maintained by the agency. Of the “Film or video” means motion pictures in-
150,000 brochures distributed, 80% were cluding feature films, shorts and documenta-
mailed to addresses outside New Jersey. ries, television films or episodes, and similar
When A-1 bills Smooth-Touch, it must film and video productions whether for broad-
charge sales tax on 20% of its fee for printing cast, cable, closed circuit, or unit distribution,
the brochures since that is the percentage of and whether in the form of film, tape, or other
direct mail that was distributed in New analog or digital medium. The exemption
Jersey. A-1 must also charge sales tax on 20% does not apply to any film or video produced
of its fee for the direct-mail processing by or on behalf of a corporation or other per-
services performed in connection with son for its own internal use for training, ad-
distributing the brochures. Separately stated vertising, or other similar purposes.
charges for the design and layout of the bro-
• Film, Audio/Visual Material: Films, records,
chure are nontaxable advertising services.
tapes, and other types of visual or sound
If A-1 performed no direct-mail processing transcriptions produced for exhibition in thea-
services, but simply produced the brochures ters or for broadcast by radio or television
and sent them all to Smooth-Touch in stations or networks and not used for
Pennsylvania, A-1 would not charge sales tax advertising may also be purchased with Form
on its fee for printing the brochures since the ST-4.

10 Rev. 9/06
 Sales Tax Exemption Administration

• Limousines: Limousines sold to a person incidental to the delivery of merchandise.

licensed under New Jersey law to operate a Storage containers are not considered to be
limousine service and charges for the repair, packaging materials. However, containers
including replacement parts, of a limousine used in a farming enterprise are exempt.
operated by a person so licensed or by a per-
Example
son licensed by another state or by the United
Henry Johnson owns a company (Crest
States to operate a limousine service.
Manufacturing, Inc.) that manufactures televi-
A “limousine” is defined as (1) a motor vehi- sion sets. In order to deliver the sets to whole-
cle registered under the provisions of N.J.S.A. salers, he must package them in cardboard
39:3-19.5, or registered as a limousine under boxes and seal the boxes with tape. When
the laws of another state or the United States; Henry purchases the boxes and rolls of tape,
and (2) used exclusively in the business of he may issue his supplier an exempt use
carrying passengers for hire to provide prear- certificate. However, he may not purchase the
ranged passenger transportation at a premium tape dispensers with Form ST-4 as these
fare on a dedicated, nonscheduled, charter items are not part of the packaging used to
basis, that is not conducted on a regular route deliver the television sets.
and with a seating capacity of no more than
See page 13 for an example of how Henry
14 passengers, excluding the driver.
will complete Form ST-4 when purchasing
For purposes of the exemption, a limousine the packaging materials necessary to deliver
does not include any taxicab, hotel or airport his television sets.
shuttle or bus, or bus used solely to transport
• Prewritten Software: Sales of prewritten
children or teachers to and from school, nor
software delivered electronically that is used
does it include any vehicle owned and op-
directly and exclusively in the conduct of the
erated without charge by a business entity for
purchaser’s business, trade, or occupation.
its own purposes.
This exemption does not apply to software
• Newspaper Advertising: Advertising materi- delivered by the “load and leave” method.
als to be published in a newspaper or maga-
• Production Machinery: Machinery and
zine, such as display or classified ads.
equipment used directly and primarily in the
• Newspaper Production Machinery: production of merchandise by manufacturing,
Machinery and equipment used directly and assembling, processing, and refining. The
primarily in the production of newspapers, exemption also applies to parts with a useful
including supplies. This machinery and life of more than one year, and to imprinting
equipment must be located in the production services performed on such machinery. The
department of a newspaper plant. exemption does not apply either to supplies or
• Wrapping/Packaging Materials: Wrapping to tools which are simple, hand-held, manu-
paper, bags, cartons, tape, rope, twine, labels, ally operated instruments used in connection
nonreturnable containers, and all other packag- with the production machinery or equipment.
ing supplies when the use of the supplies is

Rev. 9/06 11
Bulletin S&U-6

Example advertising, promotions, or research in con-

Jim purchases a turret lathe for use in his ma- nection with literary, historical, or other
chine business. He may issue his supplier an scholarly research done in fields other than
exempt use certificate instead of paying sales science and technology.
tax because the lathe will be used directly in Example
the production of merchandise for sale. How- True Alloys, Inc. purchases materials from
ever, Jim may not use Form ST-4 to purchase which it will construct an apparatus that its
a forklift used exclusively to transport his research department will use to test the
final product from the warehouse to the strength of several new alloys the company is
loading dock. developing. True Alloys will issue an exempt
• Recycling Equipment: Equipment which is use certificate to the supplier and not pay
used exclusively to sort and prepare solid sales tax on the purchase since the materials
waste for recycling or in the recycling of solid are being used directly in laboratory research.
waste. Equipment used in the process after However, True Alloys must pay sales tax
the first marketable product is produced or when it buys the special tools and dies needed
equipment used to reduce iron or steel waste to construct the apparatus since the tools are
to a molten state does not qualify. only incidental to research.
• Research and Development: Tangible • Solar Energy Devices: Devices or systems
personal property purchased for use or con- specifically approved by the Board of Public
sumption directly and exclusively in research Utilities, Division of Energy and designed to
and development in the experimental or provide heating or cooling or electrical or
laboratory sense. Research and development mechanical power by converting solar energy
in the experimental or laboratory sense means to some other usable energy source, including
research and development work which has as devices for storing solar-generated energy.
its goal or purpose: The purchaser is not required to be registered
1. Basic research in a scientific or technical with New Jersey to issue Form ST-4 to pur-
field of endeavor; or chase solar energy devices.
2. The advancement of technology by Example
experimentation in a scientific or Mary buys a solar energy collector to heat and
technical field of endeavor; or cool her home. She may issue the supplier an
3. The development of new products; or exempt use certificate instead of paying sales
4. The improvement of existing products; or tax on the collector. However, she may not use
5. The development of new uses for existing an exempt use certificate to purchase insula-
products. tion used to reduce heat loss through her walls,
Research and development does not include roof, slab, or foundation. Since insulation is
the ordinary testing or inspection of materials not directly used in the gathering, storing, or
or products for quality control, efficiency sur- conversion of solar energy, sales tax must be
veys, management studies, consumer surveys, paid when it is purchased.

12 Rev. 9/06
 Sales Tax Exemption Administration

ST-4 (2-00, R-12)

State of New Jersey
DIVISION OF TAXATION
ELIGIBLE NONREGISTERED PURCHASER'S NEW JERSEY
PURCHASER: SEE INSTRUCTIONS**
SALES TAX CERTIFICATE OF AUTHORITY NUMBER

FORM ST-4 222-092-244/000

EXEMPT USE CERTIFICATE

To be completed by purchaser and given to and retained by seller.
Please read and comply with instructions on both sides of this Certificate.

TO West End Packaging Date 5/19/06

(Name of Seller)

1166 Homer St. Hackettstown NJ 07840

Address City State Zip

The undersigned purchaser certifies that there is no requirement to pay the New Jersey Sales and/or Use
Tax on the purchase or purchases covered by this Certificate because the tangible personal property or services
purchased will be used for an exempt purpose under the Sales & Use Tax Act.
The tangible personal property or services will be used for the following exempt purpose:

Delivering television sets.

The exemption on the sale of the tangible personal property or services to be used for the above described
exempt purpose is provided in subsection N.J.S.A. 54:32B- 8.15 (See reverse side for listing for principal
exempt uses of tangible personal property or services and fill in the block with proper subsection citation).

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 Exempt Use 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.
Crest Manufacturing, Inc.
NAME OF PURCHASER (as registered with the New Jersey Division of Taxation)

26 Eleventh Ave. Hackettstown NJ 07840

(Address of Purchaser)

By Henry Johnson President

(Signature of Owner, Partner, Officer of Corporation, etc. or qualified officer of Agency)

MAY BE REPRODUCED
(Front and Back Required)

Rev. 9/06 13
Bulletin S&U-6

Exempt Organization Certificate Jersey political subdivisions and public schools.

(Form ST-5) Documentation provided to exempt purchases
An Exempt Organization Certificate, Form from sales tax is also sufficient to provide
ST-5, is used by a qualified, registered nonprofit exemption from the occupancy fee/tax.
organization to purchase, with its own funds,
goods and services for its exclusive use without For more information on exempt organization
paying sales tax. Some examples of organiza- certificates, request brochure M-5014, Exempt
tions that may have exempt status are churches, Organization Certificate Form ST-5.
hospitals, veterans’ organizations, and fire com- Direct Payment Permit
panies. When the organization makes purchases, (Forms ST-6A and ST-6X)
a photocopy of the Form ST-5 is given to the The holder of a valid Regular Direct Payment
supplier in lieu of paying sales tax. Permit may issue Form ST-6A at the time of
NOTE: State Occupancy Fee/Municipal purchase in those cases where the taxable status
Occupancy Tax. Although qualified of the purchase is not known at the time of pur-
nonprofit organizations are exempt from chase. (The holder of a valid Audit Direct Pay-
New Jersey sales tax under the New ment Permit may issue Form ST-6X at the time
Jersey Sales and Use Tax Act, these of purchase according to the terms of the
organizations are not exempt from the taxpayer’s audit agreement governing use of the
State occupancy fee or the municipal certificate.)
occupancy tax. Thus the ST-5 cannot be
To obtain a Regular Direct Payment Permit,
used to exempt a qualified nonprofit
complete an Application for Direct Payment
organization from paying either the fee
Permit, Form ST-6B, and mail to:
or the tax.
NEW JERSEY DIVISION OF TAXATION
Form ST-5 is not required for the United States
PO BOX 264
or State of New Jersey departments or agencies,
TRENTON NJ 08695-0264
or New Jersey political subdivisions or public
schools to make tax-exempt purchases. Payment An application for a Regular Direct Payment
from government funds with the official letter- Permit may be filed only by registered busi-
head or purchase order signed by a qualified nesses that acquire tangible personal property or
officer is sufficient proof for the seller of the services under circumstances which make it
exemption from paying the sales tax. For cash impossible at the time of purchase to determine
purchases of less than $150, a Form ST-4, the taxable status of the property or services.
Exempt Use Certificate, signed by a qualified NOTE: The holder of a Regular Direct Payment
government or school official is satisfactory. Permit may not use Form ST-6A to pur-
There is an exemption from paying the State chase goods that are clearly taxable at
occupancy fee and the municipal occupancy tax the time of purchase, such as office equip-
for agencies and instrumentalities of the United ment and supplies, repair services, etc.
States and the State of New Jersey, and New

14 Rev. 9/06
 Sales Tax Exemption Administration

A list of Direct Payment Permit Holders is buildings) is improved in a way that increases
available at: its capital value or useful life. A property owner
[Link]/treasury/taxation/[Link] issues Form ST-8 to the contractor and does not
pay sales tax on the labor portion of the contrac-
Farmer’s Exemption Certificate tor’s bill. Sales tax is paid on the materials at the
(Form ST-7) time of purchase by the contractor or by any
Farmers, including nursery owners and green- other individual making the purchase. A prop-
house owners, use this exemption certificate to erty owner does not need to register with New
purchase goods and certain services used directly Jersey to issue Form ST-8.
and primarily for the production, handling, and
preservation for sale of agricultural or horticul- For more information on capital improvements,
tural commodities. The exemption applies only request Tax Topic Bulletin S&U-2, Sales Tax
to purchases by the farmer; it does not apply to and Home Improvements.
purchases by contractors or others doing work
Motor Vehicle Sales and Use Tax
for the farmer. A farmer does not need to be
Exemption Report (Form ST-10)
registered with the State to issue Form ST-7. Form ST-10 is used by registered motor vehicle
The exemption does not apply to purchases of dealers to report sales tax exemptions to the
automobiles, energy, or materials which will be Division for nonresidents who have purchased
incorporated into a building or structure. How- and taken delivery of motor vehicles in this State.
ever, farmers may issue Form ST-7 to purchase The purchaser signs Form ST-10 certifying that
materials to construct a silo, greenhouse, grain he/she is a nonresident and meets all the require-
bin, or manure handling facility that is to be ments for claiming a sales tax exemption. See
used directly and primarily in the production, Good Faith on page 4.
handling, or preservation of farm commodities NOTE: If a person has homes in both New
for sale. This exception for certain construction Jersey and another state (e.g., owns a
materials applies only to purchases by farmers; house in New Jersey, but spends the
it does not apply to purchases by contractors. winters in Florida), he or she is not
For more information about exempt purchases entitled to a sales tax exemption as a
of certain commercial vehicles, including “nonresident.”
certain vehicles registered for farm use, see For more information on sales tax and motor
Commercial Motor Vehicles on page 9. vehicles, see the New Jersey Sales & Use Tax
Guide for Automobile Dealers, available at:
Certificate of Capital Improvement [Link]/treasury/taxation/pdf/[Link]
(Form ST-8)
A Certificate of Capital Improvement, Form Aircraft Dealer Sales and Use Tax
ST-8, is issued by a property owner to a contrac- Exemption Report (Form ST-10-A)
tor when work is done to real property which Form ST-10-A is used by registered aircraft
results in a capital improvement. A capital im- dealers to report exempt sales of airplanes.
provement occurs when real property (land or When a nonresident comes into New Jersey and

Rev. 9/06 15
Bulletin S&U-6

purchases an airplane, no sales tax is due pro- Example

vided the purchaser will base the airplane in James T. Anderson of Pennington, New Jersey,
another state. If the nonresident purchaser bases purchased a 32-foot motorized sailboat from
the airplane in New Jersey within 12 months of Luxury Crafts LTD, a registered vessel dealer
the date of sale, the exemption is voided and located in Toms River, New Jersey. The sales
sales tax plus penalty and interest charges are contract for Jim’s new boat specifies that the
due on the purchase price of the aircraft. vessel will be transported by Luxury Crafts to a
marina in Boca Raton, Florida, and delivered
Vessel Dealer Sales and Use Tax there to Mr. Anderson for use in that state. Lux-
Exemption Report (Form ST-10V) ury Crafts will complete a Vessel Dealer Sales
Form ST-10V is used by registered vessel and Use Tax Exemption Report (Form ST-10V)
dealers to report exempt sales of boats. An ex- and not charge sales tax on the transaction. Mr.
empt sale is one made to a New Jersey resident Anderson also signs the Form ST-10V certifying
who purchases the boat in New Jersey for use that the requirements for the sales tax exemption
outside New Jersey and, as part of the sales con- have been met.
tract, the dealer transports the boat out of State
or the dealer arranges to have the boat trans- Contractor’s Exempt Purchase
ported out of State. Sales tax is due if the resi- Certificate (Form ST-13)
dent purchaser does not pay sales or use tax on Form ST-13 is used by registered contractors to
the boat in another state and then subsequently purchase materials, supplies, or services for use
brings the boat back to New Jersey for use in in performing work on the real property of a
this State, even on a limited basis. qualified exempt organization (an organization
which holds a valid New Jersey Exempt Organi-
Also exempt is a sale made to a nonresident zation Certificate, Form ST-5); or for a Federal
who purchases the boat in New Jersey with the or New Jersey governmental entity; or for a
intention of basing it in his or her state of resi- qualified housing sponsor. The contractor pro-
dence. This exemption applies whether the non- vides Form ST-13 to his supplier and does not
resident purchaser takes possession of the boat pay sales tax on the purchase price provided the
in New Jersey or contracts with the dealer to materials will be entirely used or consumed on
have it delivered out of State. If the nonresident the job contracted for by the exempt organiza-
purchaser bases the boat in New Jersey within tion. Form ST-13 must include the exempt orga-
12 months of the date of sale, the exemption is nization number shown on Form ST-5 or, if the
voided and sales tax plus penalty and interest work is being done for a qualified government
charges are due on the purchase price of the agency, the agency’s purchase order number.
boat. The exemption does not apply if the non-
resident purchaser maintains a summer home or Form ST-13 may not be used to rent machinery
other place of abode in New Jersey. or equipment or to purchase tools or materials
such as hammers and tarpaulins (rain covers)
which may be used on other jobs. For more

16 Rev. 9/06
 Sales Tax Exemption Administration

information on Contractor’s Exempt Purchase However, there is an exemption for purchases of

Certificates, request Tax Topic Bulletin S&U-3, energy and utility service by a qualified Urban
Contractors and New Jersey Taxes. Enterprise Zone manufacturing business em-
ploying at least 250 people within the zone, at
Exemption Certificate for Student least 50% of whom were employed directly in
Textbooks (Form ST-16) the manufacturing process, for exclusive use at
The sale of textbooks for use by students in a the zone location. Such businesses must be
school, college, university, or other educational approved by the New Jersey Commerce, Eco-
institution, approved as such by the Department nomic Growth & Tourism Commission and
of Education, is exempt from sales tax. When issued Form UZ-6 in order to document the
the educational institution declares that the books exemption.
are required reading for school purposes, the pur-
Only personal property controlled by the quali-
chaser may issue the vendor Form ST-16 and not
fied business qualifies for the exemption. Tan-
pay sales tax. The purchaser is not required to be
gible personal property generally includes items
registered with New Jersey to issue Form ST-16.
such as construction materials, office supplies,
Urban Enterprise Zone Exempt office or business equipment, office and store
Purchase Certificate (Form UZ-5) furnishings, trade fixtures, cash registers, etc.
The UZ-5 exemption certificate is only appli- Exempt services performed for a qualified
cable to purchases made prior to July 15, 2006, business at its zone location include items such
regardless of the effective dates printed on as janitorial and maintenance services, installing,
the certificate. It has been replaced with the maintaining, or repairing tangible personal
UZ-5-SB, issued to small qualified businesses property used in business, etc. The exemption is
(see below) that can continue to claim the not available to sellers located within Urban
exemption at the time of purchase. Enterprise Zone-impacted business districts.

Urban Enterprise Zone Exempt Effective July 15, 2006, procedural amendments
Purchase Certificate (Form UZ-5-SB) to the law require sales tax to be collected on
Under the Urban Enterprise Zones Act, a quali- sales made to qualified Urban Enterprise Zone
fied business is eligible for an exemption from business, unless the business is a “small qualified
sales and use tax on purchases of tangible business” (annual gross receipts less than $1
personal property (other than motor vehicles and million in the prior annual tax period.) A quali-
parts and supplies) and services (except tele- fied business other than a small qualified busi-
communication services) for exclusive use or ness must pay the tax and apply for a refund.
consumption on the premises of the qualified In order to document the exemption between
business at its zone location. Tangible personal July 15, 2006, and September 30, 2006, the
property and services do not include gas, elec- Division has published a new temporary exemp-
tricity, prepared foods and beverages, rooms, or tion certificate (Form UZ-5-SB (Temporary)).
admissions. A qualified business must pay the Sellers must obtain the temporary certificate
full rate of tax on purchases of these items. from any business claiming the tax exemption at

Rev. 9/06 17
Bulletin S&U-6

the point of sale. Sellers can no longer rely on Contractor’s Exempt Purchase
the qualified business’s prior exemption certifi- Certificate — Urban Enterprise Zone
cate (UZ-5). Form UZ-5-SB (Temporary) is a (Form UZ-4)
self-executing form and purchasers are required A contractor issues a properly completed Con-
to certify that they meet the annual gross re- tractor’s Exempt Purchase Certificate - Urban
ceipts threshold of less than $1 million in the Enterprise Zone (Form UZ-4) to suppliers when
prior tax period. The effective dates of Form purchasing materials that will be incorporated
UZ-5-SB (Temporary) are July 15, 2006, to into real property, supplies that will be entire-
September 30, 2006. ly used or consumed on the job, or services for
use in performing work for a qualified business
On and after October 1, 2006, small qualified at the business’s real property in an Urban En-
businesses will be issued Form UZ-5-SB which terprise Zone. The exemption does not apply to
will be administered in the same manner as the equipment that the contractor rents or leases to
original UZ-5 form. Again, businesses which do perform work for a qualified business. The con-
not qualify as a small qualified business will be tractor can only obtain Form UZ-4 from a quali-
required to pay tax and apply for a refund. fied business. The contractor also issues copies
of Form UZ-4 to subcontractors for their use in
Effective July 15, 2006, the UZ-5 exemption
making exempt purchases for the job. Subcon-
certificate is no longer valid, regardless of the
tractors must attach their name, address, and
effective dates printed on the certificate. A
certificate of authority number (in addition to
qualified business that is not a small qualified
the name, address, and number of the contrac-
business and therefore cannot issue the new tor) and then give the UZ-4 and attachments to
UZ-5-SB (Temporary) must pay the sales tax at their vendors. Finally, this certificate is not
the point of sale, but may apply to the Division available to vendors located within Urban Enter-
for a refund within one year of the sale. prise Zone-impacted business districts.
More information on the Urban Enterprise For more information on exemption certificates
Zones Program is available on the New Jersey used by qualified businesses located within an
Commerce, Economic Growth & Tourism Urban Enterprise Zone, see Urban Enterprise
Commission’s Web site at: Zone Tax Questions and Answers, available at:
[Link]/commerce/econ_uez_program.shtml
[Link]/treasury/taxation/
[Link]

18 Rev. 9/06
 Sales Tax Exemption Administration

For More Information

By Phone Online
• Call the Division of Taxation’s Customer • Division of Taxation Web site:
Service Center at 609-292-6400 [Link]/treasury/taxation/
• TTY equipment users call 1-800-286-6613 • E-mail: [Link]@[Link]
(within NJ, NY, PA, DE, and MD) or • Subscribe to NJ Tax E-News, the Division
609-984-7300 (anywhere) of Taxation’s online information service, at:
[Link]/treasury/taxation/
[Link]

In Writing
New Jersey Division of Taxation
Information and Publications Branch
PO Box 281
Trenton, NJ 08695-0281

Order Forms and Publications

• Call the Forms Request System at • Call NJ TaxFax at 609-826-4500 from your
1-800-323-4400 (Touch-tone phones within fax machine’s phone
NJ, NY, PA, DE, and MD) or • Visit the Division of Taxation’s Web site:
609-826-4400 (Touch-tone phones anywhere) [Link]/treasury/taxation/

Rev. 9/06 19