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Doing business in

New Jersey

Navigate New Jersey’s business landscape with ease—whether you’re incorporating, expanding, or managing tax compliance. Commenda helps you stay ahead with automated solutions for incorporation, compliance, and tax filings.
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Business Overview

New Jersey features a diverse economy with strengths in pharmaceuticals, transportation, financial services, and manufacturing. The state offers a strategic location between New York and Philadelphia, excellent infrastructure, and access to a highly educated workforce from prestigious universities.

Key Facts & Figures

Category Details
Capital Trenton
Major Cities Newark, Jersey City, Paterson, Elizabeth, Trenton
State Sales Tax Rate 6.63%
Local Sales Tax Rate No local sales tax (special rates in certain areas)
Corporate Income Tax 7.6% Business Profits Tax
Physical Nexus Threshold Physical presence through employees, offices, warehouse, or inventory
Economic Nexus Threshold $100,000 in annual sales or 200 transactions

Did you know?

New Jersey is home to more pharmaceutical research facilities than any other state, driving global medical innovation.

Setup & Compliance

New Jersey business formation involves several state agencies with specific compliance requirements.

Starting a Business in New Jersey:

  1. Select Your Business Structure: Consider New Jersey’s tax environment for different entity types.
  2. Register Your Business: File formation documents with the New Jersey Division of Revenue.
  3. Register for Tax Accounts: Register for applicable tax accounts with the Division of Taxation.
  4. Obtain Required Licenses: Research and secure necessary state and local business licenses.
  5. Register as an Employer: Register with the Department of Labor if hiring employees.

Key Compliance Considerations:

  • Annual Reports: New Jersey entities must file annual reports with the Division of Revenue.
  • Sales Tax Collection: Collect and remit 6.625% state sales tax on taxable transactions.
  • Corporate Business Tax: Corporations pay graduated rates up to 9% on business income.
  • Annual Filing Fee: S-corporations pay a minimum $500 filing fee annually.
  • Local Requirements: Municipalities may impose additional licensing and regulatory requirements.

Hiring & Payroll

New Jersey provides comprehensive worker protections with several state-specific regulations.

New Jersey Payroll Taxes:

  • Unemployment Insurance: Rates from 0.3% to 5.4% on first $38,300 of wages.
  • State Income Tax Withholding: Progressive rates required.
  • Temporary Disability Insurance: Mandatory employee contribution.
  • Workers’ Compensation: Required for all employers.

New Jersey Employment Laws:

  • Minimum Wage: $14.13 per hour (as of 2023).
  • Paid Sick Leave: Employers with 10+ employees must provide 40 hours of paid sick leave annually.
  • Paid Family Leave Insurance program available.
  • Final Paycheck: Due on next regular payday.
  • New Jersey is not a right-to-work state.

State Incentives

New Jersey provides extensive economic incentives to attract and retain innovative businesses.

Key Business Incentives:

  • Grow New Jersey Assistance Program: Tax credits for job creation and retention.
  • Economic Redevelopment and Growth Program: Support for economic development projects.
  • Research and Development Tax Credit: Supports innovative company development.

Small Business & Startup Support:

  • New Jersey Small Business Development Center: Comprehensive business resources.
  • Minority and Women-Owned Business Certification Program.
  • Urban Transit Hub Tax Credit: Incentives for businesses in transit areas.

Regulatory Considerations

New Jersey provides a comprehensive regulatory framework supporting business innovation.

Key Business Regulations:

  • Data Privacy: Advanced laws protecting consumer and business information.
  • Environmental Compliance: Stringent regulations for industrial and urban areas.
  • Professional Licensing: Mandatory for various professional services.

Additional Regulatory Areas:

  • Pharmaceutical and Technology Industry Compliance.
  • Financial Services Regulations.

Explore Tax & Compliance Topics

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