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New Jersey sales tax notices

Got a letter from the New Jersey Department of the Treasury, Division of Taxation? Find it below to see what it means, why businesses usually receive it, and what to do next.

Sources checked

Tax authority

New Jersey Department of the Treasury, Division of Taxation (opens in a new tab)

Official notice guide (opens in a new tab)

Disagree with a notice?

Notices that include appeal rights can be protested in writing to the Division's Conference and Appeals Branch (CAB). Request an informal conference in the protest if you want one, and pay any uncontested amount. If you disagree with CAB's Final Determination, file a complaint with the Tax Court of New Jersey. Notices without appeal-rights language, such as a Statement of Account, generally cannot be protested.

Deadline: Protest: 90 calendar days from the date of the notice or determination. Tax Court: 90 days from the date of the Final Determination.

Source: New Jersey Department of the Treasury, Division of Taxation (opens in a new tab)

Balance due

A bill for tax, penalty, or interest the authority says is unpaid.

Balance due

Statement of Account

The first notice the Division sends to tell you that your account was adjusted or is underpaid. It is not a formal assessment and cannot be protested to the Conference and Appeals Branch.

Why you got it

  • The Division adjusted a return you filed
  • A payment did not cover the full amount due on the account

What to do

  1. Compare the statement with your returns and payment records
  2. If you disagree, send additional information to the section that issued the notice; it cannot be protested to the Conference and Appeals Branch
  3. Pay the tax you agree is owed, or respond online through NJ ONRS
  4. If it includes late filing or payment penalties and you had reasonable cause, send an abatement request to the address on the notice

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Source: NJ Submitting a Protest and Preparing for a Conference (opens in a new tab)

Balance due

Notice and Demand for Payment of Tax

A formal demand for payment of tax the Division says is owed. It can be protested only when it relates to a delinquency. It cannot be protested when it was issued for an audit assessment you did not protest.

Why you got it

  • A delinquency on the account, such as a required return that was not filed
  • An audit assessment that was not protested in time

What to do

  1. Check whether the notice includes appeal-rights language, and file any missing returns it relates to
  2. If it relates to a delinquency and you disagree, file a written protest with the Conference and Appeals Branch within 90 days
  3. Otherwise, pay the tax due or contact the Division about a payment plan
  4. For penalties, consider an abatement request with a signed reasonable-cause statement or the Abatement Request Form; the Division says interest can't be waived

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: 90 calendar days from the date of the notice to protest, where protest is allowed

Source: NJ Submitting a Protest and Preparing for a Conference (opens in a new tab)

Assessment

A proposed or final determination of tax owed, sometimes estimated when returns were never filed.

Nexus inquiry

A questionnaire or letter asking about your activity in the jurisdiction to decide whether you must register.

Nexus inquiry

State of New Jersey Nexus Questionnaire

The Nexus Audit Group sends this questionnaire to find out whether your business has activity in New Jersey that requires it to register and file for taxes such as Sales and Use Tax.

Why you got it

  • You voluntarily registered for Sales and Use Tax or another business tax
  • The Division has information that you may be doing business in New Jersey or receiving New Jersey-source income

What to do

  1. Complete the questionnaire accurately, stating whether your company had past or present business activity in New Jersey
  2. Gather records of your New Jersey sales and activities before answering
  3. Return it to the Nexus Audit Group at the address on the Division's Nexus Audit Group page
  4. Register for any tax types the review shows you need; the Division's Voluntary Disclosure Program page explains its separate process for unfiled past periods

Source: NJ Division of Taxation - Nexus Audit Group (opens in a new tab)

Collections

Enforcement on unpaid balances, such as liens, levies, warrants, or referral to a collection agency.

Collections

Collection agency initial contact letter and Schedule of Liabilities

If you do not respond to a Division notice about unpaid tax or unfiled returns, your account goes to the Division's contracted collection agency, currently Coast Professional, Inc. A caseworker mails an initial contact letter with a Schedule of Liabilities showing the current balance.

Why you got it

  • Unpaid tax on a filed return (deficiency)
  • A required return that was not filed (delinquency)
  • No response to the Division's earlier notification

What to do

  1. Contact the collection agency directly; Division staff can no longer help once a caseworker is assigned
  2. File any delinquent returns and pay the balance on the Schedule of Liabilities
  3. Expect a Referral Cost Recovery Fee; the Division says collection fees cannot be waived

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Source: NJ Division of Taxation - The Collection Process (opens in a new tab)

Collections

Certificate of Debt (COD)

A tax lien the Division files with the Clerk of the New Jersey Superior Court for unpaid tax. It has the same force as a docketed court judgment and allows levies such as bank levies.

Why you got it

  • Tax debt remained unpaid after notices and collection agency contact

What to do

  1. Contact your assigned caseworker or the Judgments Unit before making a payment
  2. Pay the balance in full with certified funds to satisfy the judgment
  3. Expect a Cost of Collection fee to be added to the docketed judgment

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Source: New Jersey Division of Taxation - Judgment Unit (opens in a new tab)

Ask for penalty relief

Penalties on a New Jersey notice aren't always final. You can ask for them to be waived. Follow the steps below, including anything the state requires you to file or pay before it reviews the request.

Abatement of Penalty (penalty waiver)

Abatement Request Form
  1. Wait until the penalty has been assessed and billed; abatement can only be granted after that
  2. Send a written statement of all facts supporting reasonable cause, signed under penalties of perjury, or the Abatement Request Form instead
  3. Mail it to the address on your billing notice or give it to your auditor; representatives must attach Form M-5008-R

What qualifies: Reasonable cause for failing to file or pay on time. For late payment you must show undue hardship. The Division may consider your prior compliance record and the type of tax.

Interest: The Division lists interest (assessed at a statutory minimum), collection fees and post-amnesty penalties as charges it cannot waive. N.J.A.C. 18:2-2.7 allows waiver of interest calculated on an abated penalty.

Source: NJ Division of Taxation - Abatement Request Form for Businesses (opens in a new tab)

Before you respond

  • Check the date on the notice. Response windows usually run from that date, not the day you open it.
  • Match the account number and filing period to your own records before paying or disputing.
  • If returns are missing, filing the actual returns usually replaces an estimated bill. Confirm how on the notice or with the authority.
  • Ask about penalty relief before paying penalties, and check what must be paid with the request. See how
  • Keep a copy of the notice and everything you send back.

This page is general information, not tax or legal advice. Notice names and procedures change, so always follow the instructions on your notice and the official sources linked above.

Need the rates, nexus thresholds and filing rules? Read the New Jersey sales tax guide.

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