(a) Sales price includes all taxes imposed on the seller.1. Excise taxes, which are imposed on manufacturers, importers, producers, distributors, or other sellers are included in the sales price, even though the excise tax may be separately stated to the purchaser. For example, the Federal manufacturer excise tax imposed on the sale or lease of certain automobiles (gas guzzlers) are included in the sales price, as are the excise taxes imposed on tires, sporting goods, and firearms.2. Excise taxes, which are imposed on the purchaser are excluded from the sales price. For example, the Federal retail excise tax imposed on heavy trucks and trailers sold at retail are excluded from the sales price.(b) Expenses billed to a purchaser but incurred by a seller in making a sale of taxable tangible personal property or services, regardless of whether the expenses are taxable or nontaxable, and regardless of whether the expenses are separately billed to a purchaser, are not deductible from the sales price on which sales tax is computed. Example 1: An equipment repairman charges $ 20.00 per hour plus certain expenses for a service call. The purchaser is billed as follows:
| Repair time-2 hours @ $ 20.00 | $ 40.00 |
| Travel time | 10.00 |
| Parts | 20.00 |
| Meals | 5.00 |
| Sales price | $ 75.00 |
The sales price subject to 7 % tax is $ 75.00.
Example 2: A photographer contracts with a purchaser to sell photographs at $ 50.00 each, in addition to the reimbursement of certain expenses. The purchaser is billed as follows:
| Photographs - 2 @ $ 50.00 | $ 100.00 |
| Model fees | 60.00 |
| Meals | 10.00 |
| Travel | 25.00 |
| Props (Flowers) | 5.00 |
| Sales price | $ 200.00 |
The sales price subject to 7% tax is $ 200.00.
(c) Term discounts, which are given by a seller for the purpose of encouraging prompt payment on an account, also known as early payment discounts, are deductible from the sales price. Example: A seller gives a purchaser a two percent discount for paying the price of a $ 100.00 camera within 10 days. If the purchaser pays within 10 days, the sales tax is to be computed on the taxable sales price of $ 98.00.
| Merchandise price | $ 100.00 |
| Less 2% early payment discount | 2.00 |
| Sales price | $ 98.00 |
| Sales tax at 7% | 6.86 |
| Amount due | $ 104.86 |
(d) Discounts that represent a reduction in price, such as a trade discount, volume discount, or cash and carry discount, are deductible in computing the taxable sales price. Example 1: A seller gives a purchaser a 30 percent discount for purchasing 1,000 light bulbs. The discounted price charged is the taxable sales price. The purchaser is billed as follows:
| 1,000 bulbs @$ 0.50 | $ 500.00 |
| Less 30% volume discount | 150.00 |
| Sales price | 350.00 |
| Sales tax at 7% | 24.50 |
| Amount due | $ 374.50 |
Example 2: A seller gives a purchaser a 10 percent cash and carry discount. The discounted price is the sales price. The purchaser is billed as follows:
| Merchandise | $ 50.00 |
| Less 10% cash and carry discount | 5.00 |
| Sales price | 45.00 |
| Sales tax at 7% | 3.15 |
| Amount due | $48.15 |
(e) When a seller issues a coupon entitling a purchaser to receive a discount upon presentation, and the seller receives no reimbursement from a manufacturer, distributor, or any other third-party, the sales tax is due from the purchaser based on the discounted price. Example 1: A store issues a coupon entitling the holder to purchase a product for $ 0.20 less than the regular selling price. The purchaser is billed as follows:
| Regular price | $ 1.00 |
| Less store coupon | .20 |
| Sales price | .80 |
| Sales tax at 7% | .06 |
| Amount due | $.86 |
Example 2: A store issues a coupon entitling the purchaser to receive two items for the price of one. The purchaser is billed as follows:
| Regular price-2 @$ 1.00 | $2.00 |
| Less store coupon for free item | 1.00 |
| Sales price | 1.00 |
| Sales tax at 7% | .07 |
| Amount due | $ 1.07 |
(f) When a seller issues a coupon entithng a purchaser to pay a reduced price on an item purchased, and the seller is reimbursed by a manufacturer, distributor, or any other third party, the tax is due on the full price of the item. The sales price is composed of the amount paid plus the amount of the coupon's stated value. Example: A store issues a coupon labeled "mfr" entitling the holder to purchase an item for $ 1.00 less than the stated purchase price. The seller bills the purchaser as follows:
| Regular price | $ 10.00 |
| Sales tax at 7% | .70 |
| Sales price | 10.70 |
| Manufacturer coupon | 1.00 |
| Amount due from purchaser | $9.70 |
(g) If a manufacturer issues a coupon entitling a purchaser to pay a reduced price on an item purchased, the tax is due on the full price of the item. The sales price is composed of the amount paid and the amount of the coupon's stated value. The coupon value reflects the payment or reimbursement by another party to the seller. Example: A manufacturer issues a coupon entitling the purchaser to purchase an item from a seller for $ 0.20 less than the purchase price. The seller bills the purchaser as follows:
| Regular price | $ 1.00 |
| Sales tax at 7% | .07 |
| Sales price | 1.07 |
| Less manufacturer coupon | .20 |
| Amount due from purchaser | $ .87 |
(h) When a manufacturer or a seller issues a coupon involving a reimbursement but does not disclose that fact to the purchaser on the coupon or in an accompanying advertisement, the seller collects only the tax due on the reduced price from the purchaser, but is required to pay the tax applicable to the entire sales price, that is, the amount of the price paid and the reimbursement received from the manufacturer. The abbreviation "mfr" appearing on the coupon shall constitute adequate notice that it is reimbursable by a third party.(i) Any allowance or credit for property of the same kind accepted in part payment by a seller on the purchase of tangible personal property and intended for resale by such seller is excluded when calculating the sales price subject to tax. Only the net sales price of tangible personal property is subject to tax. Example 1: An automobile dealer allows a purchaser a $ 2,000 trade-in for a used automobile, accepted in part payment against the purchase price of $ 20,000 for a new automobile. The dealer will hold the used automobile for resale. The purchaser is billed as follows:
| New automobile | $ 20,000 |
| Trade-in | 2,000 |
| Sales price | $ 18,000 |
| Sales tax at 7% | 1,260 |
| Amount due | $ 19,260 |
Example 2: A motor vehicle dealer allows a customer $ 500.00 for a used boat, accepted in part payment against the purchase price of $ 20,000 for a new automobile. A boat is not property of the same kind as an automobile. The customer is billed as follows:
| New automobile | $ 20,000 |
| Sales tax at 7% | 1,400 |
| Sales price | 21,400 |
| Less trade-in | 500.00 |
| Amount due | $ 20,900 |
(j) Any charge made by a seller of tangible personal property subject to tax for the shipping or delivery of property is included in the sales price subject to tax, unless the property is not taxable or the sale is entitled to exemption from tax (see N.J.A.C. 18:24-27).(k) Any charge for credit imposed by a seller and paid by a purchaser in addition to the purchase price, under a designation, such as interest, finance, or carrying charge, is not deemed to be part of the sales price of tangible personal property or charge for services rendered, if the amount is separately stated on the invoice, bill of sale, or similar document given to the purchaser. Such charges constitute consideration for the extension of credit and are not included in the sales price subject to sales tax. Example: A seller sells furniture for $ 1,000 and charges one and a half percent interest per month on the outstanding balance. The $ 1,000 selling price is subject to tax.
(l) Charges imposed by a credit card company that are deducted from a participating seller's account are charges for financial services rendered, which have no bearing on the computation of tax. Example: A seller sells furniture for $ 1,000. The purchaser uses a bank credit card. The bank, when remitting to the seller, deducts a five percent service charge ($ 50.00). The seller is required to charge and remit tax on $ 1,000.
(m) The amount of the sales price of items of property paid in, or eligible for payment with, food stamps issued in accordance with the Federal Food Stamp Act of 1977, 7 U.S.C. §§ 2011 et seq., is excluded from the taxable sales price. In the case of food stamp eligible purchases, otherwise taxable items are exempt from sales tax when food stamps are presented in full payment or when cash is submitted with food stamps used as a partial payment. Food and food ingredients exempt from sales tax under 54:32B-8.2 remain exempt whether or not purchased with food stamps. Example: If a purchaser presents $ 10.00 in food stamps and $ 32.00 in cash as payment for $ 42.00 worth of food stamp eligible items, the entire $ 42.00 is exempt from tax. This is the case even if the items consist of food stamp eligible, but taxable, food and food ingredients, such as candy. The purchase of taxable items, which are not food stamp eligible, are subject to sales tax.
(n) A manufacturer's rebate, whether or not paid directly to the purchaser, is not deductible from the sales price. Example: An automobile dealer sells an automobile to a purchaser for $ 20,000. As a sales incentive, the manufacturer agrees to give a rebate of $ 500.00 to a purchaser who purchases an automobile during the month of December. The purchaser elects to have the rebate paid to the dealer. The purchaser is billed as follows:
| Sales price | $ 20,000 |
| Sales tax at 7% | 1,400 |
| Amount due | 21,400 |
| Less manufacturer's rebate | 500.00 |
| Net cost to purchaser | $ 20,900 |
(o) For examples of how delivery charges affect the sales price, see N.J.A.C. 18:24-27.2(d).N.J. Admin. Code § 18:24-36.2
Amended by 48 N.J.R. 824(a), effective 5/16/2016