Registering Your Startup To Do Business in New Jersey

Forming your business entity in Delaware—specifically, a corporation—gives you a lot of flexibility, but you may still need to follow local laws depending on what state you operate in.

Specifically, if you do business in New Jersey, you need to register with the state. We’ll walk through the process and simplify it. But first, how can you tell whether you’re legally doing business in New Jersey?

Delaware C corps—and all other corporations formed outside of New Jersey—are referred to as “foreign” corporations by the State.

New Jersey statutes do not specifically define what is considered doing business in the state. However, by statute, New Jersey takes into account the following factors when determining whether you are doing business in the state:

• The nature and extent of the activities of the company in New Jersey
• The location of the company’s offices and other place of business
• The employment of agents, officers, and employees in New Jersey

According to New Jersey statute, the following activities would not be considered doing business in the State:

• Maintaining cash balances with banks in New Jersey
• Soliciting sales through an independent contractor
• Maintaining, defending, or settling an action or proceeding

Every state has rules about when a company is required to pay sales tax. These are called sales tax nexus rules.

You can think of the nexus as a special version of that state’s border; if you perform certain business activities within that border, you fall into the state’s sales tax nexus, and you’re required to register for and collect state sales tax.

Typically, these actions take the form of buying and selling goods and services.

In New Jersey, the sales tax nexus rules only apply to sellers who sell physical goods or services to New Jersey residents. Selling software, for example, would not trigger sales tax nexus rules.

Until 2018, selling or buying non-physical goods—like subscriptions to streaming services, SaaS memberships, etc.—did not, generally speaking, qualify you for sales tax nexus. After an important court ruling in 2018, that changed. Now, if you buy or sell non-physical goods or services in a state, you may fall within its sales tax nexus.

You may need to register with the New Jersey Division of Revenue and Enterprise Services in order to collect sales and use tax if you perform any of the following activities within the state:

• Selling, leasing, or renting tangible personal property, specified digital products, or services
• Maintaining an office, distribution house, showroom, warehouse, service enterprise (e.g., restaurant, entertainment center, business center, etc.), or other place of business
• Parking, storing, or garaging motor vehicles

You can learn more about physical presence for sales tax purposes through the State’s official notice.

The new state sales tax laws applying to non-physical (ie. internet) sales allow you to qualify for sales tax nexus even without physical presence or goods. In New Jersey, you need to cross a certain threshold to qualify.

If you meet any of following criteria, then you may need to pay sales tax to the New Jersey Division of Taxation:

• Have a gross revenue exceeding $100,000 rom sales of tangible personal property, specified digital products, or taxable services delivered into New Jersey during the current or prior calendar year
• Make 200 or more separate transactions during the current or prior calendar year by selling tangible personal property, specified digital products, or taxable services delivered into New Jersey

If you want to take a deep dive, you can check out the Division of Taxation’s guidance on sales tax nexus.

As usual, this isn’t legal advice—just a guide. If you’re not 100% clear on whether you fall within New Jersey’s sales tax nexus, it’s best to confer with your legal counsel and/or an accountant that has expertise in New Jersey’s legal code and tax regulations.

• Select a name under which to do business. This doesn’t have to be the name you registered when incorporating in Delaware, but it can be.
• Fill out an application. You can either send in your Business Registration Application by mail to the New Jersey Department of Treasury or complete the application through an online portal.
• Include a Delaware Certificate of Good Standing with your Business Registration Application. If you are filing your application online, you must fax your Certificate of Good Standing to the New Jersey Department of Treasury.
• Pay the fee. Now you pay the New Jersey Department of Treasury a $125 filing fee.
• Submit your application.
• Wait. Processing typically takes two to four weeks.

Once you’re approved to operate as a qualified foreign business in Illinois, you’ll need to comply with certain requirements.

To stay in compliance and continue legally doing business in New Jersey, you need to meet two requirements: maintaining a registered agent and filing your annual report. On top of that, you will also need to pay a corporate business tax.

Your registered agent in New Jersey is your point of contact with local authorities. If you don’t have a physical address for your company in New Jersey, it may be advantageous to find a registered agent to receive state notices on your behalf.

Foreign corporations are required to have a registered office in New Jersey. The office cannot be a P.O. box, rather it must be a physical address of your registered agent or a licensed registered agent service.

Your registered agent will forward any important information, such as business mail, to you. There are a number of firms that contract out registered agents. They typically cost $50 – $100 per year.

Every year, you must file a statement with the State, updating any changes to the company address or the composition of the Board and officers. You’ll include info like:

• The legal name of your business
• The name and address of your registered agent
• The names and addresses of board members, managers, and officers

There is a $75 fee for filing your annual report.

New Jersey’s corporate business tax includes both a state franchise tax and a corporate income tax.

A franchise tax, or a privilege tax, is a tax a company has to pay for the privilege of doing business in a state. New Jersey calculates your franchise tax based on New Jersey gross receipts. A corporate income tax is a tax imposed directly on the income of your corporation. These together make up the taxes you need to pay for your corporate business tax in New Jersey.

For more information on paying your annual taxes, please see the following guidance from New Jersey’s Division of Taxation.

If you fall within New Jersey’s sales tax nexus, you will need to collect and remit sales tax to the state.

If you indicated on your Business Registration Application that you will be collecting and remitting sales tax, New Jersey will send you a Certificate of Authority for sales tax. If you did not indicate that you will be collecting and remitting sales tax, you can register to collect and remit sales tax through the state’s online portal.

When you hire a new employee in New Jersey, federal and state laws require that you report new hires and rehires within 20 calendar days from the date the employee starts earning wages. You can report your new hires using the New Jersey employer website portal.

Your payroll provider should be able to take care of paycheck withholdings, but it’s up to you to register as an employer with the State and set up an online employer account.

Your payroll provider should be able to take care of paycheck withholdings, but it’s up to you to register as an employer with the State and set up an online employer account.

For a comprehensive guide of your responsibilities, New Jersey provides the following information.

To register your business in New Jersey, you’ve got to keep track of a lot of moving parts. Failing to file the right forms, provide the right information, or stay on top of compliance laws can lead to serious headaches.

Capbase makes it easy. When you incorporate your Delaware corporation on Capbase, we will generate the required information needed to register to do business in New Jersey and keep you up to date on any required filings.

The compliance calendar inside your Capbase account will notify you of upcoming fees, reporting, or other requirements, so you can keep your startup in good standing with New Jersey state officials. Try Capbase now.