New Jersey Sales Tax

[MarvBear]

Information from NADA Title & Registration Textbook 2004

 

New Jersey Sales or Use Tax Applicable to Registration

 

Sales tax or use tax 6% of purchase price. Credit for trade-in thus reducing the taxable base. Purchase must be from a licensed dealer only. When a customer receives more than one vehicle from a dealer for one vehicle, on an even trade, and no money changes hands, no taxes are due. Credit for a trade-in allowance is permitted only when a vehicle is traded to a registered motor vehicle dealer who takes the trade-in for resale. The credit is allowed only if the purchase and the trade-in occur at the same time and the vehicle traded in is also a motor vehicle as defined in the Sales and Use Tax Act. More than one trade-in can be applied against the purchase of a new vehicle. However, if the Title to the traded vehicle is not in the name of the purchaser of the new vehicle, the Division requires the dealer to give notice of third-party Titles accepted for credit. A copy of the purchaser’s sales contract and a copy of the Title of the trade-in vehicle will be adequate. The cash value of the trade must be clearly shown. NON_RESIDENT – Not required to pay sales tax unless employed or in a business in which the vehicle will be used in New Jersey. CREDIT given for similar tax already paid to another state. NEW RESIDENT is not required to pay tax on vehicle previously titled and registered in their name in another state. MILITARY PERSONNEL are NOT EXEMPT from sales tax. Initially taxes are paid to car dealer who forwards to the New Jersey Division of Taxation.