Running a New Jersey small business means more than just managing operations—it also involves staying compliant with state tax obligations. Knowing the taxes to pay in NJ can help you plan ahead, avoid penalties, and make smart financial decisions. Here’s a breakdown of the most common business taxes and how corporate tax services in New Jersey can help you stay on track.
The type of income tax your business pays depends on its legal structure.
C corporations in New Jersey are subject to the Corporation Business Tax (CBT):
6.5% on net income up to $50,000
7.5% on income from $50,001 to $100,000
9.0% on income above $100,000
An additional 2.5% Corporate Transit Fee applies to corporations with taxable income over $10 million, bringing the top effective rate to 11.5%
Additional info:
Taxes are based on a three-factor formula (50% sales, 25% property, 25% payroll)
Loss carryforwards and R&D tax credits may apply
Businesses like sole proprietorships, partnerships, and LLCs don’t pay corporate tax directly. Instead, income “passes through” to the owner’s personal return:
Taxed under NJ’s personal income tax brackets, ranging from 1.4% to 10.75%
If your business sells goods or taxable services in NJ, you’ll need to collect and remit sales and use tax:
The statewide sales tax rate is 6.625%
Certain digital products and services are also taxable
Some exceptions apply:
Businesses in urban enterprise zones may benefit from reduced rates
Salem County has a lower rate of 3.3125%
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If you have employees, payroll tax compliance is a must.
You must withhold NJ Gross Income Tax from employee wages (same brackets: 1.4% to 10.75%)
Employers also pay:
Unemployment Insurance
Temporary Disability Insurance
Family Leave Insurance
Workforce Development Fund
These payments support state programs and are part of your ongoing employer obligations.
Some industries face special tax requirements, including:
Utilities
Insurance companies
Petroleum and motor fuels
Financial institutions
If you’re in a specialized sector, consult the NJ Division of Taxation or work with a trusted provider of corporate tax services to ensure compliance.
Understanding the taxes to pay in NJ helps New Jersey small businesses stay compliant and financially healthy. From corporate income taxes to payroll and sales tax, each obligation comes with its own rules. Partnering with a provider of corporate tax services can make this process easier, helping you focus on growing your business with peace of mind.
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