If you have dreams of running a successful business in New Jersey, then you’ll also need to plan for the array of taxes you’ll be responsible for as a small business owner. Neglecting your tax obligations can have huge financial consequences for you and your venture, so it’s important to remain compliant with federal, state, and local tax authorities.
Here, we’ll go over everything you need to know to stay on top of your New Jersey business taxes, including:
What business taxes do you pay in New Jersey?
Many aspiring entrepreneurs expect to pay taxes on the income their new venture will generate, but in New Jersey, you can also expect to pay sales and use tax, employer taxes, and possibly industry-specific or local taxes.
Keep reading to find out which taxes apply to your business and how to file and pay them.
New Jersey personal income tax
Pass-through entities—like sole proprietorships, partnerships, and limited liability companies (LLCs) —typically don’t pay income taxes themselves. Their tax obligations pass through to their owners instead, who pay taxes on their share of the profits at the state’s personal income tax rates.
Tax rates for the state income tax (also known as the gross income tax in New Jersey) range from 1.4% to 10.75% in 2023.
How to file and pay
Personal income tax returns for New Jersey are due when the federal tax returns are due. For fiscal year filers, the deadline is the 15th day of the fourth month after the end of the fiscal year. For calendar filers, the due date is April 15.
First-time filers must file their tax returns (Form NJ-1040 for residents and Form NJ-1040NR for non-residents) by mail to the appropriate address listed on the Division of Taxation website. Returning taxpayers file their returns online through the New Jersey income tax filing portal and pay their income taxes on a separate online portal.
If you expect to owe more than $400 in income taxes, you’re required to make quarterly estimated tax payments. These payments are due by April 15, June 15, September 15, and January 15. They can be paid online through the Division of Taxation’s online payment portal.
Learn more about this New Jersey income tax by visiting the Department of Taxation website.
New Jersey partnership return
In addition to the individual tax returns filed by its partners, partnerships with New Jersey income or partners residing in the state must file a separate return on the company’s behalf.
Businesses with more than two partners and income or loss from New Jersey sources may be charged a $150 filing fee per partner (capped at $250,000). The tax rate on non-resident partner income ranges from 6.37% to 9%.
How to file and pay
If you plan on starting a business in New Jersey, you must register it with the state’s Division of Revenue and Enterprise Services at least 15 days before opening. After that, you can file and pay all your business taxes, including your partnership returns.
The New Jersey partnership return, nonresident partner tax payments, and an installment fee equal to 50% of the current year’s filing fee are due by the 15th day of the fourth month after the end of the fiscal year (or April 15 for calendar filers). Returns and tax payments can be submitted through the Division of Taxation online tax portal for partnerships.
If they expect to pay taxes, partnerships must make quarterly payments in 25% installments by the 15th day of the fourth, sixth, and ninth months of the fiscal year, as well as the 15th day of the first month following the end of the fiscal year. Payments must be made electronically.
Review the partnership tax form instructions or read the Division of Taxation’s filing requirements for more guidance on filing the New Jersey partnership return.
New Jersey pass-through business alternative income tax
New Jersey partnerships, S corporations, and LLCs taxed as partnerships or S corporations can choose to be taxed at the entity level (rather than passing their income tax obligations on to their business owners). This state tax is known as the pass-through business alternative income tax, or the PTE for short.
The New Jersey PTE tax rate ranges from 5.675% to 10.9%, plus an additional fee for businesses with an annual net income of over $250,000.
How to file and pay
Qualifying pass-through entities registered with the Division of Revenue can file for the pass-through entity tax election through the dedicated PTE online tax portal.
Once you’ve made the election, you’ll use the same system to file your PTE tax return (Form PTE-100) and make any tax payments. PTE returns are due by the 15th day of the third month after the end of the fiscal year.
Companies that take the PTE election are required to make quarterly estimated tax payments if they expect to owe over $400 in PTE taxes. These payments are due by the 15th day of the fourth, sixth, and ninth months of the fiscal year, as well as the 15th day of the first month after the fiscal year ends.
Read the pass-through business alternative income tax form instructions for more information on New Jersey’s PTE return.
New Jersey corporation business tax
Many states levy a tax against corporations for the privilege of existing or doing business within their jurisdictions. Although this tax is often called a franchise tax or privilege tax, \ it’s known as the corporation business tax (CBT), in New Jersey.
In 2023, New Jersey’s corporate business tax rate ranges from 6.5% to 9% of a corporation’s business income.
How to file and pay
Corporate business tax returns must be filed with the Department of the Treasury by the 15th day of the fourth month after the fiscal year ends. You’ll want to make sure that your business has been properly registered with the Division of Revenue before filing your return, though.
All corporations are also required to make estimated tax payments through the Division of Taxation corporate business tax portal based on the total tax liability of their most recent return:
- Companies with a total tax liability of $500 or more must make payments by the 15th day of the fourth, sixth, ninth, and 12th months of the fiscal year.
- Companies with a total tax liability of less than $500 can make installment payments according to the schedule above or make a single payment of 50% of the total tax liability.
More information on the New Jersey corporate business tax is available on the Division of Taxation website.
Sales and use tax
New Jersey imposes a sales tax on all physical products and certain taxable services sold in the state. This tax is collected from the customer at the point of purchase and sent to the Division of Taxation.
Additionally, products purchased outside of the state for use in New Jersey may be subject to a separate use tax.
The state’s sales and tax rate for the 2023 tax year is 6.625%.
If you’re unsure whether your business should collect New Jersey sales tax, check with your tax advisor or the Division of Taxation.
How to file and pay
Sales and use tax returns (Form ST-50) are due quarterly by the 20th day of the month after the end of the tax period. Sellers may be required to make monthly payments using Form ST-51 instead if they meet both of the following qualifications:
- Collected more than $30,000 in New Jersey sales and use tax during the previous calendar year
- Collected more than $500 in the first and/or second month of the current calendar quarter
No matter your filing frequency, you can file returns and make tax payments online through the sales and use tax online portal. Note that your business must be registered with the Division of Revenue before you can file your return.
For more information on the New Jersey sales and use tax, visit the Division of Taxation website. You can also find a complete list of the sales and use tax deadlines on the Division of Taxation’s list of frequently asked sales questions.
Businesses that hire employees are subject to another tax called the withholding tax or employment tax. Employers must withhold a portion of each employee’s wages and submit it to the New Jersey Division of Taxation.
The withholding tax rate differs for each employee and depends on factors like the employee’s withholding allowances and income. However, in 2023, the New Jersey withholding tax rate ranges from 1.5% to 11.8%, plus an additional fee.
How to file and pay
Before paying withholding tax, you need to register your business with the state. If you’ve already registered but need to update your records to reflect your status as an employer, you can do so on the Division of Revenue website.
Withholding tax returns are due on a monthly, quarterly, or annual basis, while the corresponding income tax withholding payments are due weekly, monthly, quarterly, or annually. Your filing frequency is assigned to you by the Division of Taxation and is determined by your monthly tax liability or the amount of tax you collected in the previous year.
The chart below summarizes the filing deadlines and tax forms required for different withholding filing frequencies.
|Withholding filing frequency||Who pays this tax?||Tax return form||Filing deadline|
|Annually||Domestic and household employers||Form NJ0927-H||January 31|
|Quarterly||All employers except for domestic employers||Form NJ-927||30th day of the month following the end of the quarter|
|Monthly||Employers with more than $500 in withholding taxes for the first and/or second months of the quarter||Form NJ-500||15th day of the month following the tax filing month|
|Weekly||Employers with $10,000 or more in annual withholding liability in a prior year||Form NJ-927-W and NJ-500||Wednesday after the pay week|
Note that most employers are required to file a quarterly return, even if there was no tax to report for the period or if they’re assigned a monthly or weekly payment schedule. Additionally, all employers must file Form NJ-W-3, along with copies of each employee’s information return, by February 15.
Withholding returns and tax payments are submitted via the New Jersey employer tax portal, authorized software provider, or payroll company.
Learn more about the New Jersey income withholding tax by reading the Division of Taxation’s income withholding tax guide.
Unemployment insurance tax
New Jersey businesses must also pay a state unemployment insurance tax once they hire their first employee and pay wages of $1,000 or more in a calendar year. This tax funds unemployment benefits for eligible workers who leave the company.
New employers are assigned a new employer tax rate for the first three years of operation. After that, they’re given a new rate based on their employment experience.
Find more information on the state’s unemployment tax rate, taxable wage base, and withholding tax calculations on the New Jersey Department of Labor and Workforce Development website.
How to file and pay
Qualifying businesses in New Jersey must file Forms NJ-927 and WR-30 with the Department of Labor on a quarterly basis. These forms and any tax payments are due by the 30th day of the month after the end of the quarter (so April 30, July 30, October 30, and January 30). Note that your business must be—and should already be–registered with the state of New Jersey to use the online tax system.
Visit the Department of Labor website for further details on the New Jersey unemployment tax.
In addition to the taxes assessed by the state, many cities and counties in New Jersey levy their own taxes on businesses within their jurisdiction. For instance, some municipalities might charge local income taxes, while others collect local sales tax (up to the maximum local sales tax rate of 3.313%).
Your company might be responsible for paying other taxes as well, depending on its industry, products or services sold, and business activities. Some of the taxes levied by the state include:
- Alcoholic beverages tax
- Cosmetic medical procedures gross receipts tax
- Cigarette tax
- Insurance premiums tax
- Motor fuels tax
- Recycling tax
- Tobacco and vapor products tax
Because these taxes are determined by the location and nature of your business, it’s best to consult your tax advisor or accountant for your company’s specific tax obligations.
New Jersey business tax breakdown by business type
Keeping track of your business tax obligations can be a time-consuming task, so below we’ve included a breakdown of the taxes each legal entity can expect to pay in New Jersey.
Remember that pass-through entities don’t pay federal income taxes themselves. Their taxes are passed on to their owners, who pay taxes through their personal returns.
|Business type||Personal income tax||Partnership return||Pass-through business alternative tax||Corporate business tax||Sales and use tax||Withholding tax||Unemployment tax||Federal income taxes|
|C corporation||No||No||No||Yes||Yes, if applicable||Yes, if you hire employees||Yes, if you hire employees||Yes|
|S corporation||Depends if they make the PTE election||No||Yes, if they make the election||Yes||Yes, if applicable||Yes, if you hire employees||Yes, if you hire employees||Yes (pass-through)|
|LLC||Depends if they make the PTE election||Depends on how it’s structured||Yes, if they make the election||Depends on how it’s structured||Yes, if applicable||Yes, if you hire employees||Yes, if you hire employees||Yes (pass-through)|
|Partnership||Depends if they make the PTE election||Yes||Yes, if they make the election||No||Yes, if applicable||Yes, if you hire employees||Yes, if you hire employees||Yes (pass-through)|
|Sole proprietorship||Yes||No||No||No||Yes, if applicable||Yes, if you hire employees||Yes, if you hire employees||Yes, by way of individual income tax|
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