New Jersey – Taxability of Purchases Made by Lawyers and Law Firms

1/18/2103

SALT Report 2053 – The New Jersey Division of Taxation issued a technical bulletin regarding the taxability of purchases made by lawyers and law firms.  New Jersey lawyers are not required to collect sales tax on charges for professional services performed by their firm or practice as provided in N.J.S.A. 54:32B-2(e)(4)(a).  Examples of non-taxable professional services include:

  • Writing wills,
  • Writing briefs, and
  • Court appearances

However, New Jersey law firms are required to pay sales or use tax on any purchases of taxable tangible property, specified digital products, and certain services used by the firm, unless an exemption applies.

Remitting Use Tax

Law firms should report and remit any use tax due on their Annual Business Use Tax Return Form ST-18B.  However, if for the last three years, a law firm’s annual use tax liability exceeds $2,000 the law firm must change its business registration to include sales tax.  Once changed, the law firm will be required to file a quarterly/monthly sales and use tax return by filing Forms ST-50/51.

Additionally, the bulletin provides an extensive list of purchases common to law firms and indicates whether the items are taxable or exempt from sales tax.

For Further Information:

New Jersey Division of Taxation – Technical Bulletin TB-69