The NJ ST-3 resale certificate lets a New Jersey-registered business buy inventory or taxable services without paying the state’s 6.625 percent sales tax, provided the items are being purchased for resale in the ordinary course of business.1New Jersey Division of Taxation. Sales and Use Tax You give the completed form to your supplier. You do not send it to the state. The tax moves down the chain and gets collected once, from the final customer.
Who Can Issue an ST-3
You need a valid New Jersey taxpayer identification number, which comes from filing the NJ-REG registration through the Division of Revenue and Enterprise Services.2Business.NJ.gov. Register for Taxes Registration gets you a Business Registration Certificate and an NJ Tax ID (your federal EIN plus a three-digit suffix). That number goes on every ST-3 you sign.
The rule behind the form is simple. Under N.J.S.A. 54:32B-12, the purchaser certifies that the property or service is being bought for resale or is otherwise exempt under the Sales and Use Tax Act.3New Jersey Revised Statutes. New Jersey Code 54-32B-12 – Collection of Tax From Customer by Persons Required to Collect Tax The ST-3 cannot be used for anything your business will consume itself: office supplies you’ll use, equipment for your own operations, or anything you plan to keep rather than sell.
How to Complete the Form
Download the current ST-3 from the Division of Taxation’s sales tax forms page.4New Jersey Division of Taxation. Sales and Use Tax Forms and Certificates The form states plainly: “Do not mail this form to the Division of Taxation.”5New Jersey Division of Taxation. ST-3 Sales Tax Resale Certificate It stays between you and your seller.
Work through it field by field:
- Certificate type. Check either Single-Purchase Certificate (one transaction) or Blanket Certificate (ongoing purchases from the same seller).
- Purchaser information. Legal business name, full address, and New Jersey taxpayer identification number.
- Type of business. A brief description of your category, such as retailer, wholesaler, or service provider.
- Certificate of Authority. You certify that you hold a valid Certificate of Authority to collect New Jersey Sales and Use Tax.
- Nature of sales. What your business principally sells. This tells the seller why the items belong in your inventory.
- Description of property or services. What you are actually buying in this transaction or series of transactions.
- Purpose of purchase. Check resale in present form, resale as a component part of a product you manufacture, or use in performing a taxable service where the item becomes part of the property serviced or is transferred to the service customer.
- Signature block. Print your name, sign as owner, partner, or corporate officer, add your title, and date the form.
The signature carries real weight. You are swearing under penalties for perjury and false swearing that the information is true.5New Jersey Division of Taxation. ST-3 Sales Tax Resale Certificate Missing fields, an unsigned form, or a blank description of goods will likely be rejected, and an incomplete certificate does not protect the seller.
Single-Purchase or Blanket
A single-purchase certificate covers one invoice. Use it for a one-time buy from a supplier you don’t expect to order from again.
A blanket certificate is the right choice when you have an ongoing relationship. It covers all future purchases of the same general type of property, as long as no more than twelve months pass between transactions.5New Jersey Division of Taxation. ST-3 Sales Tax Resale Certificate If a full year goes by with no orders, the recurring-relationship test fails and you need to issue a fresh certificate before your next order. Sellers typically keep the blanket certificate on file and apply it automatically to qualifying invoices.
Getting It to the Seller
Hand the completed ST-3 to your seller at or before the time of purchase. The seller is not required to verify your taxpayer ID or independently confirm your registration, but the certificate must be fully completed for the seller’s own protection.6New Jersey Division of Taxation. Sales Tax Exemption Administration
Timing has some flexibility. A seller who receives a fully completed certificate within 90 days of the sale is relieved of liability for the tax on that transaction, even if the exemption turns out to be improperly claimed. In that case, you as the purchaser owe the unpaid tax.6New Jersey Division of Taxation. Sales Tax Exemption Administration
Even past 90 days there is a backstop. If the Division of Taxation audits the seller and questions an exempt sale, the seller has at least 120 days after the Division’s request to obtain a completed certificate from you or produce other proof the sale was exempt. The certificate only counts here if the seller accepted it in good faith: the exemption was legally available on the date of the sale, could reasonably apply to what was bought, and fits your kind of business.6New Jersey Division of Taxation. Sales Tax Exemption Administration
When the ST-3 Is the Wrong Form
Contractors are the biggest source of confusion. A contractor buying materials and supplies for a construction job cannot use the ST-3, because those purchases are not resales. When the work is for a qualified exempt organization, an Urban Enterprise Zone business, or a qualified housing sponsor, the contractor uses Form ST-13 instead.5New Jersey Division of Taxation. ST-3 Sales Tax Resale Certificate
The ST-3 also does not cover exempt-use purchases or nonprofit organizations. A manufacturer buying equipment used directly in production needs Form ST-4, the Exempt Use Certificate.7New Jersey Division of Taxation. ST-4 Exempt Use Certificate Qualified exempt organizations such as churches, charities, and educational institutions use Form ST-5. Using the ST-3 when a different form applies can trigger back-tax assessments on every transaction that used the wrong certificate.
Out-of-State Sellers
If you’re buying from a seller outside New Jersey who is not required to be registered in the state, the seller uses Form ST-3NR rather than the standard ST-3. On the ST-3NR, a purchaser not registered in New Jersey can provide a federal employer identification number or an out-of-state registration number in place of an NJ taxpayer ID.8New Jersey Division of Taxation. ST-3NR Resale Certificate for Non-New Jersey Sellers
Streamlined Certificate as an Alternative
New Jersey participates in the Streamlined Sales Tax Agreement, so sellers may also accept the Streamlined Sales and Use Tax Agreement Certificate of Exemption.9Streamlined Sales Tax Governing Board. Exemptions New Jersey does not honor every category on the Streamlined form, and some state-specific programs still require their own dedicated forms.10New Jersey Division of Taxation. Streamlined Sales and Use Tax Agreement for New Jersey For a straightforward resale purchase, either certificate works.
Recordkeeping
Under N.J.S.A. 54:32B-16, every person required to collect sales tax must preserve transaction records, including exemption certificates, for at least four years.11New Jersey Revised Statutes. New Jersey Code 54-32B-16 – Records to Be Kept The Division can inspect those records at any time and can require them to be kept longer.
Keep your own copies too. If a seller loses a certificate and gets audited, your duplicate provided inside the 120-day window protects both of you and helps demonstrate good faith if the Division ever asks whether a specific purchase really qualified for resale treatment.
Penalties for Misusing the Certificate
Signing an ST-3 to avoid tax on items you plan to use rather than resell is not a technical foul. The form states you are signing under penalties for perjury and false swearing.5New Jersey Division of Taxation. ST-3 Sales Tax Resale Certificate At minimum, the Division will assess the full 6.625 percent tax you avoided plus interest, with penalties and possible criminal exposure for perjury on top.
Sellers are not shielded simply because they collected a piece of paper. A seller who knowingly accepts a certificate from someone obviously not buying for resale, or who takes part in a scheme to evade tax, loses good-faith protection and becomes jointly liable for the uncollected amount.6New Jersey Division of Taxation. Sales Tax Exemption Administration The standard is whether the seller had knowledge or reason to know the exemption information was materially false.