Vernoia, Enterline + Brewer, CPA LLC

The New Jersey Division of Taxation quarterly newsletter provides guidance regarding various sales and use tax issues. Specifically, it provides that sales of breast radiation treatment catheter devices to hospitals and physicians are exempt from sales tax as sales of a prosthetic device. The breast radiation treatment catheter device is considered to be an exempt prosthetic device because it is worn in the body and is part of the radiation treatment used to correct a physical deformity or malfunction.

In addition, the charge for activation of a new cellular phone is subject to sales and use tax. Because activation of the phone is necessary to complete the sale of the phone, it is taxable as part of the sales price of the phone. Also, the charge to troubleshoot and resolve issues associated with the phone is taxable as the servicing of tangible personal property. However, charges to assist customers in changing a phone number and to transfer data from one phone to another are not subject to tax.

NJ postage tax vebcpa.comFurther, postage charged to a customer as part of the sales price for printed advertising material and processing services where the material is delivered to a location in New Jersey is subject to sales and use tax. The postage expense is part of the taxable sales price whether or not separately stated to the customer. However, postage charged to a customer as part of the sales price for printed advertising material and processing services where the material is delivered out-of-state is not taxable. Delivery charges only refer to charges made by the seller of goods and services. The purchase of postage directly from the USPS is not taxable. Starting with the premise that the charges for the printed advertising material are taxable, the prepayment deposit is taxable because the taxpayer is purchasing the postage and the postage expense is part of the sales price of the printed advertising material and processing services. The charge for the customer using its own postal permit is not taxable since the postage is purchased directly from the USPS. The charge for the customer using its own postal permit and allowing the USPS to direct-debit the cost of the postage from the customer’s account is not taxable because the customer makes payment directly to the USPS. State Tax News, New Jersey Division of Taxation, Vol. 43, No. 3, December 31, 2014

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