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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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My name is ***** ***** and I wanted to know if you can help

Customer Question

Hi. My name is ***** ***** and I wanted to know if you can help me with NJ sales tax question
JA: Thanks. Can you give me any more details about your issue?
Customer: Sure. Our company is in NJ and we do direct mail projects. One of the clients (who orders the job) is located in PA. My question is: If we mailed over 25,000 envelopes and there is no way for me to find out where it was mailed what taxes should I apply to my invoice NJ or PA?
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Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

As you are NJ resident - your business is subject to NJ jurisdiction and NJ sales tax laws.

See here for specific provisions related to your industry.

http://www.state.nj.us/treasury/taxation/pdf/ssutdirectmail.pdf

Exemption and Sourcing (N.J.S.A. 54:32B-3.3)
The exemption in the law for advertising and promotional material delivered to out-of-State recipients remains applicable as long as such material meets the definition of direct mail. N.J.S.A. 54:32B-8.39. Thus, purchasers of direct mail in New Jersey are provided an exemption from sales and/or use tax in this State for any portion of such property ultimately delivered to other persons free-of-charge for use or consumption outside New Jersey, even if first shipped into New Jersey and stored for subsequent delivery. In other words, the law provides an exemption for direct mail delivered to out-of-State recipients, as well as for the direct mail processing services that are performed in connection with such material. N.J.S.A. 54:32B- 3(b)(5).

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Under the new law, the sale of tangible personal property, even if advertising or promotional in nature, does not meet the definition of “direct mail” unless the tangible personal property will be packaged with printed material and delivered or distributed by United States mail or other delivery service to a mass audience or to addressees on a mailing list. If this is not the actual use of the tangible personal property, it is not direct mail and the Section 8.39 exemption no longer applies. Thus, the tax will be due on all such tangible property when the customer takes delivery in New Jersey, regardless of whether it will then be distributed or used out of State.

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So far you would would not be able to avoid NJ sales tax without exact determination where items are delivered.

Expert:  Lev replied 1 year ago.

...

Under the new law, the sale of tangible personal property, even if advertising or promotional in nature, does not meet the definition of “direct mail” unless the tangible personal property will be packaged with printed material and delivered or distributed by United States mail or other delivery service to a mass audience or to addressees on a mailing list. If this is not the actual use of the tangible personal property, it is not direct mail and the Section 8.39 exemption no longer applies. Thus, the tax will be due on all such tangible property when the customer takes delivery in New Jersey, regardless of whether it will then be distributed or used out of State.

.

So far you would not be able to avoid NJ sales tax without exact determination where items are delivered.

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