Rev. 6/13
Nonprofit Organizations and Government Entities
Tax Topic Bulletin MISC-3
Contents
Introduction........................................................................................................................................................ 1
Sales and Use Tax Exemption ...................................................................................................................... 2
Purchases Made By Exempt Organizations ............................................................................................ 5
Sales Made By Exempt Organizations ...................................................................................................... 7
Government Entities ........................................................................................................................................ 8
Construction Contractor Exemptions .......................................................................................................11
School Purchases and Sales .........................................................................................................................11
Foreign Diplomats, Embassies, and Missions ........................................................................................13
Other Taxes and Fees .....................................................................................................................................13
Other Information ............................................................................................................................................14
This document is designed to provide guidance to taxpayers and is accurate as of the date
issued. Subsequent changes in tax law or its interpretation may affect the accuracy of this
publication.
Introduction
The New Jersey tax laws include provisions that exempt qualifying nonprofit organizations
and government entities from paying tax. This publication provides a summary of the types
of nonprofit entities that may qualify for exemption, depending on the tax or fee; the
procedures for qualifying for exempt status; the exemption certificates that must be
provided to sellers; and other important related information.
Definitions
Contractor
refers to an individual or business entity engaged in the business of improving,
altering, or repairing the land, buildings, or other real property of others (N.J.A.C. 18:24-5.2).
Exempt Organization
refers to a qualifying nonprofit organization that has applied and been
approved for the New Jersey Exempt Organization Certificate (Form ST-5).
Tax Treatment of Nonprofit Organizations and Government Entities
Rev. 6/13 2
Exempt Organization Certificate
or
Form ST-5
refers to the form issued to a nonprofit
organization
if the Division of Taxation determines that
it is qualified for exemption from
Sales and Use Tax according to the criteria provided in N.J.S.A.
54:32B-9.
Government Entity
refers to the State of New Jersey and its agencies, instrumentalities,
public authorities, public corporations (including those formed with another state), and
political subdivisions; and to U.S. Federal government agencies, departments, and
instrumentalities (N.J.S.A. 54:32B-9(a)).
Nonprofit Organization, Nongovernmental Organization,
or
Organization
refers to a private
nonprofit, nongovernmental organization. For
purposes of this publication it does
not
refer
to a
government entity or a United Nations (or similar)
organization.
Section 501(c)(3) Organization
or
501(c)(3) Organization
refers to a nonprofit organization
that has received a determination letter from the
Internal Revenue Service (IRS) stating that
the
organization is exempt from federal Income Tax
under Section 501(c)(3) of the Internal
Revenue
Code. The term also may refer to a church or
ministry that may qualify for an IRS
501(c) (3)
determination letter, even though it does not intend
to apply for an IRS
determination.
Veterans’ Organization
refers to a war veterans’ organization or post, a National Guard
organization or post, or the Marine Corps League, and their auxiliary units and societies
(N.J.S.A. 54:32B-9(b)).
Sales and Use Tax Exemption
In New Jersey, sales of tangible personal property, specified digital property, and certain
services are taxable unless specifically exempted under the Sales and Use Tax Act. However,
qualified, registered exempt organizations and New Jersey and Federal government entities
are eligible for certain sales tax exemptions. These organizations and government entities, as
well as the businesses selling to them, need to be familiar with these exemption
requirements.
Nongovernmental Nonprofit Organizations
A qualifying nongovernmental nonprofit organization may apply for exemption from Sales
Tax by submitting a Form REG-1E application to the Exempt Organization Unit of the
Division of Taxation. If the application is approved, the nonprofit organization will receive
the Form ST-5, which the organization may use for exemption from Sales and Use Tax on
qualifying purchases. An organization that has a valid Form ST-5 is exempt from collecting
Tax Treatment of Nonprofit Organizations and Government Entities
Rev. 6/13 3
sales tax on its sales, subject to exceptions described in
Sales Made By
Exempt
Organizations
.
Qualifying Organizations
The Sales and Use Tax Act, N.J.S.A. 54:32B-9(b), provides a Sales and Use Tax exemption for
nonprofit organizations of the following types or having the following purposes:
Exclusively religious, charitable, scientific, testing for public safety, literary or educational
purposes;
For the prevention of cruelty to children or animals;
A volunteer fire company, rescue, ambulance, first aid, or emergency company or squad;
Veterans’ organizations; or
An association of parents and teachers of an elementary or secondary public or private
school.
Nonqualifying Organizations
Due to the restricted wording of the exemption provision in the statute, the following types
of nonprofit organizations (non-501(c) (3) organizations) do
not
qualify for exemption:
Business associations and leagues, including chambers of commerce;
Social or recreational clubs, including senior citizens’ clubs;
Civic, community, homeowners’ or tenants’ associations;
Fraternal organizations (except veterans’ organizations) including, but not limited to, Elks
Lodges, Hibernian Orders, Kiwanis Clubs, Knights of Columbus Councils, Lions Clubs,
Masonic Lodges, Moose Lodges, Odd Fellows Lodges, and Rotary Clubs;
Labor unions; and/or
Political organizations.
For the same reasons, an IRS 501(c)(4), 501(c)(5), 501(c)(6), 501(c)(7), etc., organization does
not
qualify for a Form ST-5 (except if it is a volunteer firefighting, rescue or emergency,
veterans,’ or parent-teacher organization).
Although some of the nonqualifying organizations may do some charitable or educational
work, they do not qualify for Sales Tax exemption because they are not
exclusively
charitable
or educational organizations, as required by IRC section 501(c)(3) and N.J.S.A. 54:32B-9(b).
Tax Treatment of Nonprofit Organizations and Government Entities
Rev. 6/13 4
Applying for Form ST-5
To apply for the Form ST-5, a nonprofit organization must file an Application for ST-5
Exempt Organization Certificate (Form REG-1E) with the Division of Taxation. There is
no fee
to apply. The application is available on the Division’s Web site or can be requested in
writing from the New Jersey Division of Taxation, Regulatory Services Branch, PO Box 269,
Trenton, NJ 08695-0269, or by fax at 609-989-0113.
The application must include a copy of the articles of organization (e.g., certificate of
incorporation or constitution) and any bylaws of the organization. The nonprofit
organization should include an IRS determination letter of exemption under IRC Section
501(c)(3).
Volunteer fire companies, rescue or emergency squads, veterans’ organizations, and parent-
teacher organizations do not need to provide a copy of an IRS 501(c)(3) determination letter;
however, they should include any IRS determination they have.
The Form REG-1E application and required documentation must be mailed to: New Jersey
Division of Taxation, Regulatory Services Branch, PO Box 269, Trenton, NJ 08695-0269, or
faxed to 609-989-0113.
Churches Churches or ministries that do not have an IRS 501(c)(3) determination letter
should submit their Form REG-1E application, articles of organization, and bylaws. The
Division will contact them if further documentation is required.
Affiliated Organizations Each separate organization must complete a separate Form
REG-1E application for Form ST-5. An organization
cannot
use or borrow the Form ST-5 of
an affiliated organization.
Out-of-State Organizations If a nonprofit organization is located outside New Jersey and
wants exemption from New Jersey Sales Tax, the organization must obtain Form ST-5 by
completing the Form REG-1E application (see
Applying for
Form ST-5
above). Another
State’s exempt organization certificate cannot be substituted for the New Jersey Form ST-5.
NJ-REG Tax Registration Form
A nonprofit that needs to register to pay employer withholding (payroll) taxes or other State
taxes and/or fees must complete Form NJ-REG. If the organization is a qualifying
organization (see
Qualifying Organizations
) and
only
needs to apply for exemption from
Sales Tax, the organization may complete an REG-1E form without also completing Form NJ-
REG.
Tax Treatment of Nonprofit Organizations and Government Entities
Rev. 6/13 5
Purchases Made By Exempt Organizations
If an organization’s REG-1E application is approved, the Division of Taxation will issue Form
ST-5 to the organization as proof of exemption from Sales and Use Tax. An exempt
organization may use Form ST-5 for exemption from Sales Tax on purchases (except for
natural gas and electricity) that are directly related to the organization’s purposes and that
are paid for with the organization’s funds.
If a purchase is made using personal funds (personal check or personal credit card), the
purchase does
not
qualify for exemption from Sales Tax, even if the individual making the
purchase will be reimbursed by the organization.
The exemption applies to purchases of goods (e.g., office supplies and equipment), motor
vehicles, services, telecommunications services, meals, and admissions, as well as to
Sales
Tax
imposed on hotel or motel occupancies. The Form ST-5 also may be used for exemption
from Sales Tax imposed on rentals and leases of tangible personal property. However, Form
ST-5 does
not
exempt the organization from: (1) State occupancy fees; or (2)
municipal occupancy tax; or (3) Sales Tax imposed on natural gas or electricity
purchases.
Further information is available in publication TB-46,
Exemptions for Organizations Having
ST-5 Exempt Organization Certificate
. Information on the taxability of electricity or natural
gas purchases is available online.
Using Form ST-5
Information for Both Sellers and Exempt Organizations Organizations should reproduce
the original Form ST-5 and use these copies when purchasing merchandise and services for
the purposes of the organization. The organization must retain the original Form ST-5.
A valid Form ST-5 has the organization’s name, address, exemption number, and effective
date preprinted on it by the Division of Taxation. If an exempt organization has a change in
name, address, or Federal ID number, an officer of the organization must request a new
Form ST-5. Details on requesting an updated Form ST-5 are available online. If a seller is
given a Form ST-5 that has been altered, the seller must decline it and ask the organization
to provide a copy that has been updated by the Division of Taxation.
Further information on using and updating Form ST-5 is available online.
Tax Treatment of Nonprofit Organizations and Government Entities
Rev. 6/13 6
Subsequent Transactions Once a seller has a copy of a valid Form ST-5 in its records, the
ST-5 serves as proof of exemption for subsequent transactions for the same organization.
For subsequent transactions, the seller’s sales records must adequately identify the exempt
organization buyer and the transaction date.
Requesting a Refund If an exempt organization erroneously pays Sales Tax (e.g., a copy of
the Form ST-5 was not provided to the seller), the organization may either request a refund
from the seller (tax refunded at the option of the seller) or file a claim for refund from the
Division of Taxation using Form A-3730.
Specific Exempt Purchase Situations
Atlantic City and Cape May County For information, see page 13.
Boy Scout and Girl Scout Groups Dens, packs, and troops of Boy Scouts or Girl Scouts
must obtain a copy of their Council’s Form ST-5 from the local Council. When making
exempt purchases, the leader must sign a copy of the Form ST-5; provide a copy to the
seller; and pay with the funds of the den, pack, or troop. If the troop leader uses a personal
check or personal credit card to make the purchase, the purchase does
not
qualify for
exemption, even if the leader will be reimbursed by the scout group.
Cemeteries Cemetery companies are exempt from a broad range of taxes (N.J.S.A. 45:27-1
et seq.). In general, cemetery companies will issue a Form ST-4, Exempt Use Certificate, as
proof of exemption from Sales Tax and are not required to provide a Form ST-5. However,
some cemeteries, due to their charitable or religious status, have a Form ST-5.
For more information about cemetery companies, see publication ANJ-22,
Cemeteries,
Funerals
& New Jersey Taxes.
Contractors Working on an Exempt Organization’s Real Property For information on the
exemptions for materials purchased by contractors see Construction Contractor Exemptions
.
Out-of-State Purchases Members of a New Jersey exempt organization traveling outside
the State will need to seek advice from the other jurisdiction for information on exemption
status and procedures. For merchandise shipped or brought into New Jersey, an exempt
organization is exempt from New Jersey Use Tax, as long as the organization purchased it
for the organization’s exempt purposes.
Tax Treatment of Nonprofit Organizations and Government Entities
Rev. 6/13 7
Sales Made By Exempt Organizations
An exempt organization must collect Sales Tax if it operates a retail business (except a
qualifying “thrift” store) or if it maintains a business operation selling taxable services or
merchandise more than occasionally. However, an exempt organization is not required to
collect Sales Tax if it makes only occasional fundraising sales that are relatively short in
duration, and all of the proceeds go to the exempt organization.
Occasional Fundraising Sales
In general, a nonprofit organization having a valid Form ST-5 is exempt from collecting Sales
Tax for occasional fundraising sales. Examples of occasional fundraising sales are:
Annual book and/or greeting card sales lasting a few weeks;
Gift merchandise sales, such as plants or crafts, which occur several times a year and last
one or two days.
For additional information on the tax treatment of sales made by exempt organizations, see
publication TB-46,
Exemptions for Organizations Having ST-5 Exempt Organization
Certificate
.
Retail Businesses
An exempt organization that continuously operates a store, or the equivalent of a store such
as a mail-order or Internet business, is required to collect Sales Tax, except for qualifying
thrift stores. Exempt organizations must collect Sales Tax when operating an eating or
drinking establishment or other regular business making taxable sales.
Qualifying Thrift Stores An exempt organization thrift store qualifies for exemption from
collecting Sales Tax on
donated
items if:
At least 75% of the store merchandise consists of donated items; and
At least 75% of the work to operate the store is performed by volunteers.
Example An exempt organization operates a thrift store in which all the merchandise is
donated and 50% of the work is done by paid employees. The store must collect Sales Tax
on all of its sales. The store fails to meet the exemption criterion that at least 75% of the
work is performed by volunteers.
The thrift store exception applies to sales of donated merchandise only. If the store also
regularly sells taxable merchandise that was not donated, the store must collect Sales Tax on
Tax Treatment of Nonprofit Organizations and Government Entities
Rev. 6/13 8
the nondonated merchandise. For more information, see publication TB-46,
Exemptions for
Organizations Having ST-5 Exempt Organization Certificate
.
Admission Charges
Charges for admission to events that are conducted by an exempt organization are not
taxable when all of the proceeds from the admissions are for the exclusive benefit of a
qualified New Jersey exempt organization and do not benefit any individual stockholder or
other member of that organization. For more information on exempt organizations and
admission charges, see Tax Topic Bulletin S&U-11,
Admissions Charges
.
Carnivals, Rodeos, Circuses The Sales Tax exemption does
not
apply in the case of
admissions to carnivals, rodeos, or circuses in which any professional performer or operator
participates for compensation. For more information on the Sales Tax treatment for these
charges, see publication TB-50,
Amusement Ride Operator’s
Responsibility to Remit Sales
Tax For Admission
Charges to Carnivals Conducted In Conjunction
With Exempt
Organizations
.
Membership Fees Exempt organizations are exempt from collecting Sales Tax on initiation
fees, membership fees, or dues to their facilities (e.g., YMCAs and YWCAs). The status of the
seller simply as a “nonprofit” organization is not sufficient to qualify for exemption. For
additional information concerning membership fees or dues, see the Tax Note on this topic.
Magazine Subscriptions
A membership periodical distributed by an exempt organization to its members, as a benefit
of membership in the organization, is exempt from Sales and Use Tax (N.J.S.A. 54:32B-8.5).
For more information, see publication ANJ-21,
Newspapers, Magazines, Periodicals and New
Jersey Sales Tax
or Tax Topic Bulletin S&U-4,
New Jersey Sales Tax Guide.
Government Entities
New Jersey State agencies, instrumentalities, political subdivisions and authorities, and
Federal agencies and instrumentalities are generally exempt from paying Sales and Use Tax
and from collecting Sales Tax (N.J.S.A. 54:32B-9(a)). The New Jersey Sales and Use Tax Act
does
not
provide exemption to other states or the District of Columbia.
Tax Treatment of Nonprofit Organizations and Government Entities
Rev. 6/13 9
Exempt Purchases
Proof of Exemption
Sellers need proof of exemption to substantiate that an exempt government entity (New
Jersey or Federal) made direct payment to the seller. The acceptable proofs of exemption
include: a copy of a government voucher, a government purchase order form, a purchase
order made on government letterhead stationery, a copy of a government check, or a copy
of a government credit card indicating direct government payment.
Exempt government entities are
not
required to provide sellers an exemption number or an
exemption certificate (see
Cash Purchases of
$150
or Less
below). Similarly, a letter from the
not
required. The Division of Taxation does not
provide an exemption number to government entities.
Although an exemption letter is not required, a New Jersey or Federal government entity
may request a letter confirming its exemption by writing to the New Jersey Division of
Taxation, Regulatory Services Branch, PO Box 269, Trenton, NJ 08695-0269; by fax to
609-989-0113; or by email to
Federally chartered
credit unions also may request an exemption letter, since they are treated as exempt Federal
instrumentalities. (State-chartered credit unions do
not
qualify for exemption and should not
request an exemption letter.)
Natural Gas and Electricity State and local government entities and exempt organizations
(e.g., schools, churches, nursing homes, etc.) generally are not exempt from Sales Tax on
purchases of natural gas and electricity. More information is available online.
Cash Purchases of $150 or Less
When a New Jersey or Federal government entity makes a cash purchase of $150 or less, the
entity must complete and provide an Exempt Use Certificate, Form ST-4, as proof of
exemption (no exempt number required). Form ST-4 is not required when there is other
proof of direct government payment, such as a purchase order. The ST-4 is
not
valid when
the cash purchase exceeds $150 or when a government employee uses cash to purchase a
hotel or motel occupancy.
Hotel/Motel Occupancies
Occupancies of a room in a hotel, motel, or similar facility may qualify for exemption, as long
as the hotel or motel has proof of direct payment by a New Jersey or Federal government
entity. This government exemption extends to the State Occupancy Fee, Municipal
Occupancy Tax, Atlantic City Luxury Tax, and/or Cape May County Tourism Sales Tax and
Tax Treatment of Nonprofit Organizations and Government Entities
Rev. 6/13 10
Tourism Assessment. For occupancies, Form ST-4 may
not
serve as a substitute for the
required direct government payment. See
Federal Government Employees
Traveling in New
Jersey
below.
Federal Government Employees Traveling in New Jersey
For detailed information on the Sales Tax treatment of purchases made by Federal
government employees traveling in New Jersey, see Sales Tax Guidelines for Hotels and
Motels
.
Government Contractors
Businesses do
not
qualify for Sales Tax exemption simply by reason of having a contract with
an exempt government entity. Businesses that have a government contract are generally
subject to Sales and Use Tax. For example, when a business purchases a laptop computer to
use in New Jersey to perform a government contract and the business claims that it will be
transferred to the government at the end of the contract, the laptop computer does not
qualify for exemption from Sales and Use Tax.
However, certain purchases made by construction contractors may be exempt. See
Construction
Contractor Exemptions
.
Sales Made By Government Entities
In general, a government entity is required to collect Sales Tax on sales made from a shop or
store except when it is “a seller of services or property of a kind not ordinarily sold by private
persons.” (N.J.S.A. 54:32B-9(a) (1)). A government entity that needs a determination as to the
taxability of a particular type of sale may request one by writing to the New Jersey Division
of Taxation, Regulatory Services Branch, PO Box 269, Trenton, NJ 08695- 0269; by fax to
609-989-0113; or by e-mail to
Parking, Storing, Garaging Motor Vehicles For the Sales Tax treatment of parking
provided by a government entity, see publication ANJ–23
,
Parking, Storing, Garaging Motor
Vehicles &
New Jersey Sales Tax
.
Membership Fees For information on the tax treatment of charges for access to publicly
owned recreational facilities (e.g., public golf courses or public swimming pools) see the Tax
Note on this topic.
Concession Stands at Veterans’ Homes Pursuant to N.J.S.A. 54:32B-8.54, concession
stands located at a State residential veterans’ facility, operated pursuant to N.J.S.A. 38A:3-6,
are
Tax Treatment of Nonprofit Organizations and Government Entities
Rev. 6/13 11
exempt from collecting Sales Tax on their sales. This exemption applies to a State veterans’
home concession stand, whether it is operated by the State or a private business.
Construction Contractor Exemptions
As provided by N.J.S.A. 54:32B-8.22, a contractor improving, altering, or repairing the real
property of an exempt organization or exempt government entity is exempt from Sales and
Use Tax on qualifying purchases.
Qualifying purchases are purchases of construction materials, construction supplies, and a
few qualifying services, if used exclusively and entirely consumed in erecting structures or
building on, or otherwise improving, altering, or repairing real property belonging to an
exempt entity. The exemption does
not
extend to equipment (e.g., bulldozers, jackhammers,
or computers) purchased, leased, or rented to perform the work on the real property.
Exemption Certificates A contractor must retain a copy of the exempt organization’s Form
ST-5 or a copy of the government contract. To make qualified exempt purchases the
contractor must provide a Contractor’s Exempt Purchase Certificate, Form ST-13, to its
suppliers. If a contractor buys materials from a seller that does not collect Sales Tax (i.e., a
seller outside of New Jersey), then the contractor should retain a completed Form ST-13 in
his/her records to demonstrate that the purchases qualified for the exemption. For more
information, see Tax Topic Bulletin, S&U-3,
Contractors and New Jersey Taxes;
publication
TB-67,
Contractor Exemption for
Improving, Altering, or Repairing the Real Property
of
Qualified Exempt Entities
.
If a contractor intends to pick up materials in another state, the contractor should check with
that state to determine if any exemptions are available.
School Purchases and Sales
Private Schools
An exempt private school must give its suppliers a copy of its Form ST-5. In general, an
exempt private school should not use, and a seller should not accept, Form ST-4. (For details
on Form ST-4, see the instructions for the form or Tax Topic Bulletin S&U-6,
Sales Tax
Exemption
Administration
.)
Tax Treatment of Nonprofit Organizations and Government Entities
Rev. 6/13 12
New Jersey Public Schools
For sales to a New Jersey public school, sellers only need a copy of a school purchase order
or other proof of direct payment by the public school. For purchases of $150 or less made
with cash from a school fund (e.g., prom fund) a public school must provide sellers with
Form ST-4 signed by a school official.
NOTE: New Jersey public schools generally are not issued a Form ST-5. See
Exempt
Purchases
.
Purchases Made By School Employees
When an employee of a school makes a purchase using a personal check or personal credit
card, there is no exemption from Sales Tax, even if the employee provides Form ST-4 or ST-5
to the seller. If the person making the purchase pays with personal funds, the exemption
from Sales Tax does not apply even if the purchaser will receive reimbursement from the
school.
School Stores
A school store that merely puts low-price merchandise out on a folding table or two, one or
two days a month during the school year, is
not
treated as a store that is required to collect
Sales Tax.
School Fundraisers
Sales Tax is not required to be collected for occasional school fundraiser sales, provided the
buyer makes payment directly to an exempt school or an exempt organization, including an
exempt parent-teacher organization. When payment is made directly to a business, such as a
for-profit merchandiser, the sale does
not
qualify for exemption, unless otherwise exempt
(e.g., sale of clothing).
School Cafeterias
The Sales and Use Tax Act specifically exempts sales of prepared food and drink to students
enrolled at elementary, secondary, and postsecondary schools (N.J.S.A. 54:32B-8.3). However,
cafeterias and other eating establishments at colleges and universities must charge Sales Tax
to teachers and others that do not have a student identification card (N.J.A.C. 18:24-12.5).
Food Stands at School Functions
Sales Tax is not required to be collected on sales at a school food or concession stand
operated only during school athletic games or special events if the stand is operated by, and
all profits go to, the exempt school, parent-teacher organization, or athletic booster club. For
Tax Treatment of Nonprofit Organizations and Government Entities
Rev. 6/13 13
more information see publication TB-49
, Purchases and
Sales by Schools and Affiliated
Organizations
.
Foreign Diplomats, Embassies, and Missions
New Jersey sellers occasionally make sales to foreign diplomats or to embassies and
missions of foreign countries. Entitlement to Sales Tax exemption, for either diplomatic
personnel or the missions, is administered by the U.S. Department of State, which
issues tax
exemption cards
. Information about the Diplomatic Tax Exemption Program is available on
the U.S. Department of State’s website. Also, the Division of Taxation provides information in
publication TB-53
,
Diplomat/Consular Sales Tax Exemptions
.
Questions regarding the Diplomatic Tax Exemption Program should be directed to the U.S.
Department of State at 202-895-3500 or 646-282-2825.
Other Taxes and Fees
Atlantic City Luxury and Cape May County Tourism Taxes
Exempt organizations are
not
exempt from the Atlantic City Luxury Tax or the Cape May
County Tourism Sales Tax and Tourism Assessment. The statutes imposing those taxes
provide exemption only for New Jersey and Federal government entities.
An exempt organization, however, may use its Form ST-5 to be exempt from the
Sales Tax
portion of the bill. For more information, see publications ANJ-17
, Atlantic City: Luxury Tax,
New
Jersey Sales Tax and Other Fees,
and TB-23
,
Cape May County Tourism Tax.
Corporation Business Tax
If a nonprofit organization is incorporated and operating as a nonprofit corporation, the
nonprofit corporation is exempt from the New Jersey Corporation Business Tax (N.J.S.A.
54:10A-3). A nonprofit corporation may request a letter from the Division of Taxation
confirming that it is exempt from Corporation Business Tax. Instructions for obtaining an
exemption letter are available on the Division of Taxation’s website.
Local Property Tax
For information on exemption from Local Property Tax for qualifying nonprofit use of real
property, contact the Tax Assessor in the corresponding municipality.
Tax Treatment of Nonprofit Organizations and Government Entities
Rev. 6/13 14
Motor Fuel Tax
Sales of motor fuel made to the State of New Jersey and the Federal government are exempt
from New Jersey Motor Fuel Tax under N.J.S.A. 54:39-112(b)(3).
In general, sales of motor fuel made to nonprofit organizations are not exempt from motor
fuel tax. However, if the nonprofit organization purchases the fuel for one of the exempt
purposes enumerated in N.J.S.A. 54:39-112(a), it may claim a refund based on the exempt
use by filing Form MFA-20. Among the exempt purposes that would be of interest to
nonprofit organizations are fuel used for ambulances or for emergency vehicles used
exclusively by volunteer first-aid or rescue squads.
Partnership Fees or Taxes
If a nonprofit organization is a partner in a partnership, and the partnership is required to
remit partnership filing fees for Form NJ-1065 purposes, there is no filing fee exception for
the nonprofit members. See publication TB-55,
Partnership Filing Fee and Nonresident
Partner
Tax
. On the other hand, a partnership generally is
not
required to remit Nonresident
Partner Tax on behalf of its nonresident partners for any partner that is a nonprofit
organization (N.J.S.A. 54:10A-15.11(c)).
Petroleum Products Gross Receipts Tax
Gross receipts from sales of petroleum products to an exempt organization may be eligible
for exemption from the Petroleum Products Gross Receipts Tax (PPGRT) if the exempt
organization has invoices meeting certain standards and has a contract to purchase the
products for a period of one year or longer. New Jersey and Federal government entities
also are eligible for exemption, under less stringent requirements. For details, see Form
PPT-5.
The tax and the exemption are administered by the Division of Taxation’s Excise Tax Branch,
which may be reached at 609-633-9057.
Other Information
Annual Report
To maintain its status as a corporate entity, a New Jersey nonprofit corporation
must
file a
corporate Annual Report online and pay the annual fee on the Division of Revenue and
Enterprise Services’ web site. For further information, including possible exceptions for Title
16 religious corporations, call 609-292-9292.
Tax Treatment of Nonprofit Organizations and Government Entities
Rev. 6/13 15
Information on obtaining a copy of the nonprofit certificate of incorporation is available
online or by calling the Division of Revenue and Enterprise Services at 609-292-9292.
NOTE: The Division of Taxation cannot provide a copy of a certificate of incorporation; it
must be obtained from the Division of Revenue and Enterprise Services.
Business Registration Certificate
Nonprofit organizations intending to sell goods or services to a State or local government
entity may obtain information about the Business Registration Certificate (BRC) through the
Division of Revenue and Enterprise Services’ website or by calling the Division of Revenue
and Enterprise Services at 609-292-9292.
Federal Form 990
Nonprofit organizations are
not
required to file a copy of Federal Form 990 or a comparable
annual income reporting form with the Division of Taxation. However, they may be required
to make an annual filing with New Jersey’s Charities Registration and Investigation Section
within the State Division of Consumer Affairs. That website also has a link for information on
holding games of chance fundraisers, such as raffles and 50/50s. For Federal requirements
(e.g., Form 990), visit the IRS website or contact the IRS at 1-877-829-5500.
Unrelated Business Income Tax
The State of New Jersey does not impose an unrelated business income tax on nonprofit
organizations.
For More Information
Online
Division of Taxation website;
Email general State tax questions.
Do not include confidential information such as Social Security or federal tax identification
numbers, liability or payment amounts, dates of birth, or bank account numbers in your
email;
Subscribe to
NJ Tax E-News
, the Division of Taxation’s online information service.
By Phone
Call the Division of Taxation’s Customer Service Center at 609-292-6400;
Text Telephone Service (TTY/TDD) for Hearing-Impaired Users: 1-800-286-6613 (toll-free
within NJ, NY, PA, DE, and MD) or 609-984-7300. These numbers are accessible
only
from
Tax Treatment of Nonprofit Organizations and Government Entities
Rev. 6/13 16
TTY devices. Submit a text message on any New Jersey tax matter and receive a reply
through NJ Relay Services (711).
In Person
Visit a New Jersey Division of Taxation Regional Information Center. For the address of the
center nearest you, visit our website or call the Automated Tax Information System at 1-800-
323-4400.
Forms and Publications
Visit the Division of Taxation’s website for forms and publications.
Call the Forms Request System at 1-800-323-4400 (within NJ, NY, PA, DE, and MD) or
609-826-4400 (touch-tone phones only) to have printed forms or publications mailed to
you. NOTE: Due to budgetary constraints, supplies are limited and only certain forms and
publications can be ordered through this System.
