As a New York based business do I have to collect New Jersey state tax?

Question

I am trying to get a clear answer on this. I've heard different things from different people. I am a sole proprietor in New York with a small onsite computer repair business. Most of my customers are based in New York for which I collect NY sales tax on my labor and any parts that I buy wholesale. I have just picked up my first New Jersey client just over the border. My question is, do I have to collect NJ sales tax my labor since I did the work at his location. Its my understand that it is not required for me to collect it and that the client is responsible to pay it to the his state. NY and NJ has a reciprocal tax agreement that I can sign up for but it seems to be that that it is voluntary and not required. Whats the answer on on all this. Do I or do I not have to collect NJ sales tax? Thanks in advance, Adam

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Benjamin Yazersky CPA · Accepted Answer

If you provide a service in NJ that is subject to NJ sales tax, then you have to collect it. Whether or not the NY/NJ combined reporting is beneficial to you, you would have to discuss that with your own CPA.

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Katie · Answer

You do have to collect NJ sales tax if you perform taxable services within the state. You must register as a seller with the state of New Jersey and file sales and use tax returns there. You can get the details on the NY-NJ reciprocal agreement in New Jersey Division of Taxation Publication ANJ-14, which is available on line. Under that agreement, you would not be required to register as a seller with New Jersey. You would collect the tax at the appropriate rate for the NJ jurisdiction where the service is performed, and pay it over to the state of New York along with your regular sales tax collections. New York would then pay it to New Jersey. Either way, you must collect and pay over the tax.

Katie in San Diego

As a New York based business do I have to collect New Jersey state tax?

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