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St 7 New Jersey: Usage Guide

Filling out the ST-7 New Jersey Farmer’s Exemption Certificate involves several straightforward steps. This form is specifically designed for farmers in New Jersey who are making purchases exempt from sales tax, as outlined under N.J.S.A. 54:32B-8.16. To ensure a smooth process and compliance with New Jersey state law, each section of the form must be completed accurately. Following these steps will help farmers claim exemption from sales tax on eligible purchases, including tangible personal property and services used primarily in farming operations.

1. Start by entering the seller's information at the top of the form, including the name and address of the seller to whom you're presenting this exemption certificate.
2. Fill in the date on which you are completing the form.
3. Choose the type of certificate you are filing: either a "Single Purchase Certificate" for a one-time purchase or a "Blanket Certificate" for multiple purchases over time from the same seller.
4. Under the section that starts with “The purchaser certifies that it is exempt..”, mark the box that applies to your situation.
5. Describe the agricultural or horticultural commodities produced at your farming enterprise in the space provided.
6. Detail the tangible personal property or service purchased that qualifies for this exemption.
7. Include the name of your farm or enterprise, along with the business address, in the designated spaces.
8. Sign the form as the farm owner, partner, officer of the corporation, or other qualified representative. Include your title next to your signature.
9. If you are an eligible nonregistered purchaser (meaning you do not have a New Jersey Tax Registration Number), enter either your Federal Identification Number or, if a sole proprietor, the last three digits of your Social Security Number in the top right corner of the form where indicated.

Once the form is fully completed and signed, you must present it to the seller to make your tax-exempt purchase. Keep in mind that this exemption certificate is your documentation that the purchases made are for direct use in farming operations and are thus exempt from sales tax, according to New Jersey law. The seller is required to keep this certificate for at least four years following the purchase. It’s a good practice for you, as the purchaser, to also keep a copy for your records.

When filling out the ST-7 New Jersey Farmer's Exemption Certificate, several common mistakes can lead to the form being improperly completed. Recognizing and avoiding these errors can ensure smoother transactions and compliance with state regulations.

1. Not providing complete information:

   All sections of the form must be fully completed, including the description of agricultural or horticultural commodities produced, and the tangible personal property or service purchased. Incomplete forms may not be considered valid.

2. Incorrect Tax Registration Number:

   The correct New Jersey Tax Registration Number, Federal employer identification number, or out-of-state registration number must be provided. For individual purchasers, including a driver’s license number is necessary if no other registration number is applicable. Mistakes here could invalidate the certificate.

3. Failing to check the correct certificate type:

   Choosing between a "Single Purchase Certificate" and a "Blanket Certificate" is required. The right selection ensures the certificate's proper application to transactions, either for a single purchase or multiple future purchases.

4. Using the form for ineligible purchases:

   The exemption certificate does not apply to all purchases. For instance, motor vehicles, natural gas, electricity, or materials for building structures (other than specified farming structures) are not covered. Using the form for such purchases misinterprets its permitted use.

5. Not including the date or signature:

   The certificate must be dated and signed by the purchaser or a qualified representative. This ratifies the information provided and asserts the purchaser’s claim for exemption. An unsigned or undated form may not be legally binding.

Avoiding these mistakes ensures that the ST-7 form is filled out correctly, helping New Jersey farmers take advantage of the sales and use tax exemption on eligible purchases. Proper completion and accurate information are key to utilizing this certificate effectively.

When using the ST-7 New Jersey Farmer's Exemption Certificate, individuals and businesses engaged in farming often need to complement this form with additional documents to fully address their tax exemptions and related matters. Below is a list of other forms and documents that are commonly used along with the ST-7 form, each with a brief description.

• ST-4 Exempt Use Certificate: Required when purchasing vehicles or equipment that do not fall under the farmer’s exemption, especially for trucks or tractors with a gross vehicle weight rating of more than 18,000 pounds used in farming operations.
• ST-3 Resale Certificate: Utilized by farmers who also engage in selling agricultural products they did not produce, allowing them to buy supplies without paying sales tax, on the condition that the items will be resold.
• Form NJ-REG: Needed for business registration in New Jersey, which is necessary for any farmer who sells goods or services subject to sales tax or who is an employer.
• SS-4 Application for Employer Identification Number (EIN): Required for farmers operating as partnerships or corporations to obtain an EIN from the IRS, which is needed for tax filings and is sometimes required on New Jersey tax documents.
• Form WR-30 Employer Report of Wages Paid: Necessary for farmers who employ workers and are therefore required to report wages and pay unemployment contributions.
• Annual Tax Return Forms: Including both federal (e.g., Form 1040 with Schedule F for farming income) and state tax return forms, these documents are essential for reporting revenue from farming operations.
• Property Tax Farmland Assessment Forms: Used by farmers to apply for reduced property tax rates on their farmland by proving that the land is used for agricultural purposes.

Accurate completion and submission of these documents, along with the ST-7 New Jersey Farmer's Exemption Certificate, ensure that farmers can take full advantage of tax exemptions and comply with state and federal tax regulations. Familiarity with each form’s specific requirements will aid in the efficient management of a farming enterprise's tax-related responsibilities.

The New Jersey ST-4 Exempt Use Certificate parallels the ST-7 Farmer's Exemption Certificate in several significant ways, chiefly in their shared purpose to provide tax exemptions under specific conditions. Both forms serve as attestations by the purchaser that the goods or services acquired will be utilized in a manner that qualifies for exemption from sales and use taxes, with the ST-4 form focusing broadly on purchases used in an exempt capacity and the ST-7 specifically on agricultural or horticultural production. Each form requires the purchaser to detail the nature of the goods or services and affirms that these will be used in compliance with New Jersey tax law criteria, thus relieving the seller from the obligation of collecting sales tax if the certificate is filled out completely and accurately.

Similar to the ST-7 form, the Streamlined Sales and Use Tax Agreement Certificate of Exemption (SSUTA) serves a broader spectrum of purposes but aligns with the concept of exempting certain purchases from sales tax. Both documents require clear articulation from the purchaser about the purpose of the purchases and their eligibility under specific parts of tax law. However, the SSUTA Certificate of Exemption extends beyond the state level, assisting in tax-exempt purchases across member states, reflecting the uniform policy intended to simplify sales and use tax collections.

The New Jersey Resale Certificate, another vital document in the realm of sales and use tax, is akin to the ST-7 form in that it allows for tax-free purchases but diverges in its application. While the ST-7 is tailored towards agricultural use, the Resale Certificate is employed by purchasers who intend to resell the acquired property in the course of their business. The critical similarity lies in the mechanism of exemption; both certificates prevent the collection of sales tax at the point of sale, with the understanding that the tax implications will be addressed in a different manner — through eventual resale for the Resale Certificate and through qualified agricultural use for the ST-7.

The Certificate of Capital Improvement (Form ST-8) shares with the ST-7 form the premise of exempting certain purchases from sales tax, with a focused application on tangible personal property that will be capitalized and not resold. Both forms necessitate an understanding of the precise nature of the intended use of purchased goods to qualify for exemption. Whereas the ST-7 certificate is concerned with agricultural production, the ST-8 zeroes in on improvements to real property that enhance its value, emphasizing the specialized contexts in which New Jersey tax law affords a sales tax reprieve.

When filling out the ST-7 New Jersey Farmer’s Exemption Certificate, individuals should adhere to the following guidelines to ensure the form is completed correctly and to maximize the likelihood of the exemption being accepted.

• Ensure accuracy: Fill out the form with accurate information regarding the agricultural or horticultural commodities produced, and the tangible personal property or service purchased. Incorrect information can invalidate the exemption.
• Verify eligibility: Confirm that the purchases are used directly and primarily in agricultural or horticultural production as stipulated under N.J.S.A. 54:32B-8.16, to qualify for the exemption.
• Use appropriate identification: Provide the correct New Jersey Tax Registration Number, Federal Identification Number, or Social Security Number (for sole proprietors) in the designated area. This is critical for validating the form.
• Complete fully: Do not leave any required fields blank. Incomplete forms may not be accepted and can delay transactions.
• Act in good faith: Ensure that all information provided on the certificate is truthful and that there’s a bona fide intention behind the exemption claim.
• Keep copies: Retain a copy of the filled-out certificate for personal records for a minimum of four years from the date of sale covered by the certificate.

• Assume all purchases are exempt: Do not use the certificate for items like motor vehicles, natural gas, electricity, or materials intended for the construction of non-exempt buildings or structures, as these do not qualify for the farmer’s exemption.
• Use outdated forms: Avoid using old versions of the certificate. Always ensure the form is the current version to comply with updated regulations.
• Omit the date or signatory details: Failing to date the certificate or provide the signature of the individual farm owner, partner, officer of corporation, or other qualified representative can render the certificate void.
• Ignore the good faith provision: Don’t fill out the certificate with false information or with the intent to fraudulently claim exemptions, as this compromises the seller's ability to accept the certificate in good faith.
• Skip eligibility verification for nonregistered purchasers: If not registered with the New Jersey Division of Taxation, ensure to correctly note eligibility by providing either the Federal Identification Number or the relevant Social Security Number digits.
• Forget to mark subsequent sales slips: For those using a blanket certificate, it's important not to overlook the requirement to mark each sales slip or purchase invoice with the purchaser’s details, as failure to do so can lead to complications in validating exempt purchases.

• One common misconception is that the ST-7 New Jersey Farmer's Exemption Certificate can be used for the purchase of motor vehicles. However, the certificate explicitly states it does not apply to purchases of motor vehicles, natural gas, electricity, or property to be used to construct a building or structure, except for certain farming infrastructure like silos, greenhouses, grain bins, or manure handling facilities. Therefore, for the purchase of trucks or truck tractors exceeding certain gross vehicle weight ratings, a different form, the Exempt Use Certificate (ST-4), must be utilized instead.

• Another misconception involves the eligibility of purchasers. Many believe that any New Jersey resident engaged in farming can use this exemption certificate. However, to be eligible to use the Farmer's Exemption Certificate, the purchaser must be operating what the state defines as a "farming enterprise." This means they are using land primarily to raise agricultural or horticultural commodities for sale. Importantly, enterprises primarily engaged in boarding or training horses, or selling agricultural or horticultural products produced by others, are not considered “farming enterprises” for the purposes of this exemption.

• There's also confusion regarding the form's requirement for a New Jersey Tax Registration Number. The ST-7 form provides a space for "Eligible Nonregistered Purchaser" at the top right, which allows for the entry of a Federal Identification Number or, if a sole proprietor, the last three digits of the Social Security Number. This clarifies that not all users of the certificate need to be registered with the New Jersey Division of Taxation, addressing misunderstandings about mandatory state registration for all users of this form.

• Some users of the ST-7 incorrectly assume that the exemption is automatically applicable to all of their purchases once they provide the certificate to a seller. The truth is the exemption only applies to items that will be used directly and primarily in the production, handling, and preservation for sale of agricultural or horticultural commodities at the farming enterprise. This means each item's eligibility must be determined based on its intended use in the farming operation, which may not include all purchases made by the enterprise.

• Lastly, a frequent misconception is regarding the procedure for filing a blanket certificate. It's often mistakenly believed that once a blanket certificate is filed, no further documentation is needed for future transactions. However, the instructions for the ST-7 form clearly state that each sales slip or purchase invoice based on the blanket certificate must be clearly marked with the purchaser’s name, address, and identification number, to ensure compliance and maintain the integrity of the tax exemption process.

Understanding the proper use of the ST-7 New Jersey Farmer's Exemption Certificate is crucial for farmers in New Jersey to ensure they make exempt purchases without incurring unnecessary taxes. Here are key takeaways to remember when filling out and using the form:

• Scope of Farmer’s Exemption: It's important to understand the specific exemptions and limitations associated with the ST-7 form. The exemption strictly applies to purchases used directly and primarily in agricultural or horticultural production by entities recognized as “farming enterprises.” Crucially, it does not cover purchases like motor vehicles, natural gas, electricity, or materials for constructing buildings or structures (with a few exceptions like silos and greenhouses).
• Acting in Good Faith: For the form to be considered valid, both the purchaser and the seller must act in good faith. This means the form must be accurate, complete, and devoid of any false entries. Sellers accepting these forms in good faith are usually protected from liability for collecting sales tax if it’s later determined that the exemption was not applicable. The document must also be provided within 90 days of the sale and include all requisite identification numbers.
• Blanket Certificates: The ST-7 allows for the use of blanket certificates for ongoing transactions between a purchaser and seller. When opting for a blanket certificate, each sales slip or purchase invoice related to the blanket certificate must clearly state the purchaser’s details and identification number to maintain validity over time.
• Eligibility for Nonregistered Purchasers: The form accommodates purchasers not registered with the New Jersey Division of Taxation but still requires identification via a Federal Identification Number or, for sole proprietors, the last three digits of their Social Security Number. This section ensures that even unregistered farmers can still benefit from exemptions, provided they meet the specific conditions laid out on the form.

Ultimately, both sellers and purchasers must keep detailed records and ensure the accuracy and completeness of each ST-7 form used. Doing so not only ensures compliance with New Jersey's tax laws but also secures the financial benefits intended for the state's agricultural sector. Misuse or misunderstanding of these exemptions can lead to tax liabilities, making careful attention to these details imperative for all involved.