New Jersey – Taxability of Commercial Gas

SALT Report 1732 – The New Jersey Division of Taxation issued guidance regarding the taxability of sales of commercial gases.  The Sales and Use Tax Act imposes tax on sales of tangible personal property and “gases” are included in the definition of tangible personal property.

However, N.J.S.A. 54:32B-8.7 provides an exemption from sales tax for “sales of gas other than natural gas, water, steam, or fuel delivered to consumers through mains, lines, pipes, or in containers or bulk.”  The Division considers the sale of commercial gases such as oxygen, acetylene and argon, to fall within the scope of the exemption as they are not one of the enumerated taxable items.

Therefore, commercial gasses are exempt from sales tax.  To claim the exemption, the purchaser must provide an Exempt Use Certificate – Form ST-4 to its supplier in lieu of paying sales tax.

For Further Information:

New Jersey Division of Taxation – Technical Advisory Memorandum TAM-2012-3