And the biggest news on the state front is…
More and more states are finding new ways to line their coffers without raising tax rates, and much of this emphasis involves sales tax. NJ has joined the list of states that REQUIRE you to deal with use tax in conjunction with your annual income tax filing.
Some examples will help.
Remember that vacation you took to that other state with a lower sales tax rate? How about that big ticket item you drove all the way to Delaware to buy? Technically, your duty-free European vacation and your garage sale finds need to be added in. And don’t forget all those nifty online purchases. In short, if you somehow managed not to pay any sales tax, or you paid less sales tax someplace else, NJ insists you pony up the difference to NJ in the form of “use tax.”
There has always been a box on the form where you could voluntarily submit this money, but now, I can’t file without checking it off. Which means I can’t file without you signing more compliance paperwork. And the language is clumsy. You get to choose between three options:
*1* certifying no use tax is due
*2* declaring you kept poor records and cannot substantiate anything, and therefore are willing to allow NJ to assess your use tax at according to a schedule
*3* providing specific information so that your use tax is precise (and possibly less than option 2)
Did anybody out there keep all their receipts for 2018 so they could tabulate the sales tax paid and reveal the actual use tax due?
If you read the questions carefully, you will be able to add back for cities/states where you paid more sales tax. I suspect the whole thing is really about the fines and penalties, both on you and on me, for failing to check all those boxes.
New Jerseyfornia has also established its very own health insurance mandate…but that’s for 2019 so let’s not borrow trouble. This year, all I have to do is ask you if you have health insurance at the time we file.
On the bright side, you no longer have to sign a specific form giving me permission to actually file your NJ taxes. My opinion? Since NJ doesn’t get any revenue from asking you to sign that form, they are willing to piggyback on the federal form. At least we’re saving trees.