New Jersey Sales Tax Demystified
Sales Tax in New Jersey is pretty straightforward with the exception of a Watercraft sale. Let’s get the ground work out of the way first then we will tackle the Watercraft Tax.
- Tax Rates:
- State Sales & Use Tax Rate is currently 6.875%. This dropped from 7% on January 1st, 2017
- Watercraft Sales get taxed at 50% of the State Sales & Use Tax Rate
- Motor Vehicle Tire Fee is $1.50 per new tire sold
- Shipping & Delivery: If any items on the invoice are taxable then so are these charges
- Jobs/Service Ticket Taxable Items:
- Regular Jobs:
- Labor
- Shop Materials
- EPA Charge
- Pickup/Delivery
- Extended Warranty/Service Contract Jobs:
- The Deductible, if any, IS taxed.
- Regular Jobs:
- Serialized Units Taxable Items:
- Unit Price
- Freight
- Setup
- PDI
- Attached Accessories
- Installation/Labor
- Extended Warranty/Service Contract
- Pre-Paid Maintenance Policy
- Tire Wheel/Roadside Hazard Protection Policy
- Theft Protection Policy
- Key Replacement Policy
- LoJack
- Battery Tender
- Battery Protection Policy
- Chemicals (Interior Protectant, Paint Protectant, Undercoating)
- DOC/Admin Fees
- Trade-In Credit: The buyer gets credit for ALL units being traded in even if there are more Trade-In units than the number of units they are purchasing
- Watercraft Sales:
- These get taxed at 50% of the State Sales & Use Tax Rate.
- Note 1: Watercraft ONLY get the discounted tax rate; the trailer it is sitting on (if one exists) does NOT!
- Note 2: Trade-Ins: Due to the different tax rates involved, per the State of NJ, we must match up unit types for trade-in credit. ie: Match up PWCs with PWCs and tax the difference using the Watercraft Tax and match up Trailers with Trailers and tax the difference at the full State Tax Rate.
- Note 3: The State REQUIRES dealers to track taxes on Watercraft sales which is why there is a separate Watercraft Tax in Lizzy.