Originally Posted by Gnella
Yeah, NJ is 7% buy only on labor. No tax on material if you pay the tax when you but it or it would be double taxation. Also, disposal fees are non taxable. Gets crazy. We were audited a few years ago.
allthough the state allows deductions and has a line on the quarterly or monthly report, you are supposed to give the vendors you use a resale tax certificate and handle all yourself.
they don't really bust chops about it too much but they want you to have your certificate on file with your most active suppliers to minimize the deductions.
initially the deduction line was actually intended for the retail businesses that sold to other businesses for resale.
no one likes the resale certificate because it is a little extra work, not much, but it raises the red flag and the likelyhood of getting a audit if you have too many deductions for too much money each month.
they may all be legit but it is a hassle when you got to take the time and show all your paperwork to back the deductions and it also gives them the opportunity to scratch you for something else.
but it is NJ, the police and tax state.