ST-3

The seller must collect Sales Tax on the sale of taxable property or services unless the purchaser gives them a fully completed exemption certificate.

Do not mail this form to the Division of Taxation.

*As registered with the New Jersey Division of Taxation

The purchaser certifies that:

(1) They hold a valid Certificate of Authority to collect New Jersey Sales and Use Tax.

(4) The property described above is being purchased for (check all boxes that apply):

I, the undersigned purchaser, have read and complied with the instructions and rules promulgated pursuant to the New Jersey Sales and Use Tax Act with respect to the use of the resale certificate, and it is my belief that the seller named herein is not required to collect the Sales or Use Tax on the transaction or transactions covered by this certificate. The undersigned purchaser hereby swears under the penalties for perjury and false swearing that all of the information shown in this certificate is true.

(Owner, Partner, Corporate Officer)

To claim an exemption from Sales Tax on the purchase of taxable property or services, the purchaser must provide a fully completed exemption cer- tificate to the seller. Otherwise, the seller must collect the tax. The purchaser must provide the following information for the exemption certificate to be considered fully completed:

• Name and address;
• New Jersey taxpayer identification number;
• Type of business;
• Reason(s) for exemption;
• Signature, if using a paper exemption certificate (including fax

The seller’s name and address are not required for the exemption certificate to be considered fully completed.

A seller must be registered to accept an exemption certificate. The seller is relieved of liability for collecting Sales Tax on transaction(s) covered by the certificate as long as the certificate is fully completed and is received within 90 days of the date of sale. The seller is relieved of liability even if the pur chaser improperly claimed the exemption, in which case the purchaser will be held liable for nonpayment of the tax.

If the seller either has not obtained an exemption certificate or has obtained an incomplete exemption certificate, the seller has at least 120 days after the Division’s request for substantiation of the claimed exemption to either:

1. Obtain a fully completed exemption certificate from the purchaser taken in good faith, which in an audit situation means the exemption:

• Was statutorily available on the date of the transaction(s); and
• Could apply to the property or service being purchased; and
• Is reasonable for the purchaser’s type of business; or

2. Obtain other information establishing that the transaction(s) was not subject to tax.

If the seller obtains this information, the seller is relieved of any liability for the tax on the transaction unless it is discovered through the audit process that the seller had knowledge or had reason to know at the time the information was provided that the information relating to the exemption claimed was materially false or the seller otherwise knowingly participated in activity intended to purposefully evade the tax that is properly due on the transaction. The burden is on the Division to establish that the seller had knowledge or had reason to know at the time the information was provided that the informa tion was materially false.

A single exemption certificate may cover additional purchases of the same general type of property by the same purchaser with which the seller has a recurring business relationship. For purposes of this section, a recurring business relationship exists when a period of no more than 12 months elapses between sales transactions.

To use this form as a blanket certificate, check the applicable box at the top of the form. Each subsequent sales slip or purchase invoice based on the blanket certificate must be clearly marked with the purchaser’s name, address, and identification number.

Certificates must be retained by the seller for four years from the date of the last sale covered by the certificate. Certificates must be in the physical possession of the seller and available for inspection. A seller that enters data elements from paper into an electronic format is not required to retain the paper exemption certificate.

Proper Use of Form ST-3

1. A retail appliance store owner issues a resale certificate when purchasing appliances from a supplier for resale.

2. A furniture manufacturer issues a resale certificate when purchasing lumber to be used in manufacturing furniture for sale.

3. A service station operator issues a resale certificate when purchasing auto parts to be used in repairing customers’ cars.

Improper Use of Form ST-3

In the examples below, the seller cannot accept a resale certificate and must collect Sales Tax.

1. A lumber dealer cannot accept a resale certificate from a tire dealer that is purchasing lumber for use in altering its premises.

2. A distributor cannot issue a resale certificate on purchases of cleaning supplies and other materials for its own office maintenance, even though it is in the business of distributing such supplies.

3. A retailer cannot issue a resale certificate on purchases of office equipment for its own use, even though it is in the business of selling office equipment.

4. A supplier cannot accept a resale certificate from a service station that purchases tools and testing equipment for use in its business.

5. A contractor cannot issue Form ST-3 for purchases of materials and supplies. If the property being worked on belongs to a qualified exempt orga nization, a qualified Urban Enterprise Zone business, or a qualified housing sponsor, see Contractor’s Exempt Purchase Certificate (Form ST-13) and Contractor’s Exempt Purchase Certificate - Urban Enterprise Zone (Form UZ-4

For more information, see S&U-6, Sales Tax Exemption Administration, which is available at www.nj.gov/treasury/taxation/pdf/pubs/sales/su6.pdf