Sales and Use Tax Guidelines and Resources

The New Jersey Sales and Use Tax Act imposes a tax of 7 percent upon the receipts from every retail sale of tangible personal property and the sale of certain services. In addition, most services performed upon tangible personal property are taxable unless they are specifically exempted by law. Exempt items include:

  • most food sold as grocery items,
  • most clothing and footwear,
  • disposable paper products for household use,
  • prescription drugs, and
  • over-the-counter drugs.

Rutgers is generally exempt from New Jersey sales and use tax pursuant to N.J.S.A.54:328-9. Section 54:32B-9 for exempt organizations states: (a) Except as to motor vehicles sold by any of the following, any sale, service or amusement charge by or to any of the following or any use or occupancy by any of the following shall not be subject to the sales and use taxes imposed under this act; (1) The State of New Jersey, or any of its agencies, instrumentalities, public authorities, public corporations (including a public corporation created pursuant to agreement or compact with another state) or political subdivisions where it is the purchaser, user or consumer, or where it is a vendor of services or property of a kind not ordinarily sold by private persons.

Tax Exempt University Purchases

Rutgers New Jersey Sales Tax Exemption Letter (PDF)
Provided by the State of New Jersey to Rutgers, this document may be used by authorized personnel for university purchases from any vendor to exempt purchase from sales and use tax. The letter states ST-5 or other sales tax forms are not required.

Sales Tax Charged by Rutgers

Rutgers Must Collect Sales Tax

The New Jersey Sales and Use Tax Act imposes a tax of 7 percent upon the receipts from every retail sale of tangible personal property and the sale of certain services. State law specifies that the purchaser is liable for paying sales tax, and vendors are responsible for collecting tax and remitting it to the state. The university is a vendor.

When making sales for goods or services to outsiders, all university units must report these transactions through the general ledger accounting system using proper natural account and account information each month following the sale month. University Accounting consolidates all taxable sales and a monthly report is generated detailing taxable and nontaxable sales and tax withheld. The Tax Department uses the monthly report to file sales tax returns and remit New Jersey sales tax collected to the state.

State Occupancy Fee and Municipal Occupany Tax

In addition to New Jersey sales tax on hotel and motel room rentals, New Jersey charges a State Occupancy Fee and Municipal Occupancy Tax. State instrumentalities such as Rutgers are exempt from the fee and tax as provided in the legislation enacted. Rutgers exemption letter for sales and use tax is also used to exempt Rutgers from the New Jersey State Occupancy Fee and Municipal Occupancy Tax. Please refer to the "Educational Institutions" section.

Out-of-State Purchases

Rutgers may be exempt from sales and use tax in other jurisdictions depending on the individual state laws and regulations.

Out-of-State Sales Tax Exemption Chart (PDF)
This chart lists states where Rutgers is exempt from sales tax, no sales tax exists, and/or states where the university is taxable on purchases. In states where Rutgers is exempt from sales and use tax, see the tax exemption certificates (listed to the right) or contact the Tax Department for individual state exemption certificates to provide to an out-of-state vendor.