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Notice: Law Governs ‘We Pay the Tax’ Promotions

State law authorizes most New Jersey retail vendors to advertise that they will pay the 6.625% New Jersey Sales Tax for customers in particular transactions. Sellers of natural gas, electricity, and utility services are NOT authorized to advertise in such a manner.

To take advantage of the law, the vendor must meet these conditions:

1. The advertisement must indicate that the vendor is paying the tax for the customer and cannot imply that the sale is not subject to tax;
2. If the customer receives a sales receipt, invoice or other written statement of the transaction, it must indicate that the vendor is paying the 6.625% New Jersey Sales Tax;
3. The vendor must pay the tax as trustee for the State and is liable for the tax in the same manner as if it were collected from the customer.

The tax is to be reported and remitted as "Sales Tax," not as "Use Tax" because the vendor is assuming the obligation to pay the Sales tax FOR the customer. All sales where the vendor pays the tax under these conditions must be included in the vendor's gross receipts, and the tax must be remitted accordingly.