Practice Reminder: NJ Sales Tax Rate Changing January 1, 2017
In 2018 the sales tax rate will further decrease to 6.625%. So why is such a small change important enough to note? Failure to implement this change will lead to over collection of sales tax and if done for a long period of time will put the company in a disadvantage against competition.
Companies that have implemented an automated sales tax platform as part of their invoicing system will not be affected by the change as the system should automatically update the sales tax rate. However, companies that manually maintain the sales tax rates should immediately change the sales tax rate effective January 1, 2017. It is recommended that companies test and make sure the correct sales tax rate is used.
For Quickbooks users, go to Edit > Preferences > Sales Tax > Company Preferences Tab and select the “add sales tax item” to create a new sales tax item with a rate of 6.875%. On January 1 you can then go to Costumers > Item List and deactivate the old 7% sales tax item to avoid errors going forward.
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Donald Foster, CPA T (732) 842 3113 [email protected]
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The information contained herein is not necessarily all inclusive, does not constitute legal or any other advice, and should not be relied upon without first consulting with appropriate qualified professionals for your individual facts and circumstances.
