N.J. Admin. Code § 18:2-5.8

Current through Register Vol. 56, No. 21, November 4, 2024

Section 18:2-5.8 - Refund claim procedures

(a) When applicable, certain amended returns may be required to be submitted electronically. Copies of paper forms are available at http://www.state.nj.us/treasury/taxation/forms.shtml. Procedures for filing for a refund after a return has been submitted are as shown in (b) through (e) below.

(b) For gross income tax:

1. Employer refunds: If the taxpayer made an overpayment when remitting employee withholdings with a Return of Gross Income Tax Withheld (Form NJ-500), the taxpayer should make the adjustment on the next NJ-500 filed electronically after the error is discovered. A written explanation should be included with a legible copy of the erroneous Form NJ-500, any calculations, and the amount of tax remitted should be adjusted accordingly on the subsequently filed Form NJ-500. Alternatively, the taxpayer may apply for a refund of an overpayment when filing a Gross Income Tax Reconciliation of Tax Withheld (Form NJ-W-3) at the end of the calendar year along with the documents described above. If the error is discovered after all NJ-500 and the NJ-W-3 forms are filed, the taxpayer should complete another NJ-W-3, write "Amended" across the top of the form, and submit it with the corrected information and supporting documentation.

2. Individual refunds: The taxpayer may amend a gross income tax return and request a refund by filing an Amended Income Tax Resident Return (Form NJ-1040X) either electronically or by mail for the year in question. There is no amended return for nonresident filers. Nonresident filers should complete an Income Tax Nonresident Return (Form NJ-1040-NR) for the appropriate tax periods and write "Amended" across the top.

(c) For corporation business tax, a corporate taxpayer may amend a corporation business tax return and request a refund by filing a completed new return of the same type and tax year that the taxpayer used to file the initial return and write "AMENDED RETURN" on the front page of the form. Any schedules that have changed since filing the original return should be attached. For refunds of corporation business tax, see 18:7-13.8, 13.9, and 13.10.

(d) For sales tax (other than urban enterprise zone refunds):

1. Business refunds: If the person required to collect the tax overpaid sales tax on the Monthly Remittance (Form ST-51), the adjustment should be made on the Sales and Use Tax--Quarterly Return (Form ST-50). If the person required to collect the tax failed to adjust the quarterly return, a Claim for Refund (Form A-3730) and a New Jersey sales tax amended return should be completed for the appropriate tax period(s).

2. Individual refunds: If the taxpayer overpaid sales tax when making a retail purchase, the taxpayer may request a refund directly from the seller from whom the purchase was made. However, if the seller has already submitted the tax to the State, the taxpayer must complete a Claim for Refund (Form A-3730) and include supporting documents to substantiate the claim.

3. Refund claims of sales and use tax must include documentation of all transactions to substantiate the tangible personal property or service that is the subject of the refund claim and the amount requested. Documentation required is as follows:

i. The Claim for Refund (Form A-3730) must be filed with documents, such as invoices, receipts, proof of payment of tax, and exemption certificates. These documents must be provided in a format suitable to determine the correctness of the grounds for the refund and the amount of the refund or credit. Acceptable formats include photocopies or in lieu of paper copies, imaged documents. Imaged documents, which can be read with universal readable software, such as Adobe PDF and presented on CD may be submitted if first:

(1) The taxpayer submits a proposed plan for the submission to the Sales Tax Refund Section and received a written approval; and

(2) In claims of 25 or more transactions, the images of the documents are presented in an organized manner, which permits examination of the documents together with an electronic spreadsheet listing the transaction (see (d)4 below) and the taxpayer retains the original invoices for Division examination;

ii. All sales/purchase documentation must clearly identify the seller, purchaser, invoice number, invoice date, description of the transaction, amount of the invoice excluding the tax, and the amount of sales tax billed for the transaction. For those transactions exempt from sales tax by the tendering of an exemption certificate, the documentation relevant to all transactions with the issuer of the exemption certificate must clearly identify the purchaser. Cash receipts, register tapes or other receipts that do not identify the purchaser are not acceptable;

iii. Proof of payment for sales/use tax remitted.

(1) Proof of sales tax remitted to sellers is required and the Division will accept copies of canceled checks. If payment was made electronically, the Division will accept copies of bank statements with an itemization of all the transactions that make up the electronic payment. A request for use of an alternative proof of payment must be requested in writing to the Sales and Use Tax Refund Section and written approval received by the claimant prior to submission of such alternative proof of tax payment in support of the refund claim. Any approved alternate proof of payment must provide a trail between the documents presented by use of notation, highlighting, or other identification of the particular matching transactions.

(2) Proof of use tax accrual and remittance is required and the Division will accept copies of detailed journal entries or detailed listings previously prepared by the taxpayer in determining the use tax liability as reported on the ST-50 Sales and Use Tax Quarterly Return, an ST-18 Use Tax Return, an ST-18B Annual Business Use Tax Return, or on the Gross Income Tax Individual Return NJ-1040. Payment of use tax will be confirmed from Division records;

iv. When the basis of a claim for refund is the receipt of an exemption certificate from the customer after the seller has remitted the tax on their ST-50 return, then copies of the following documents are required:

(1) The exemption certificate;

(2) The initial invoice showing the amount of tax billed; and

(3) Proof of issuance and use of customer credit or other proof of repayment of the tax to the customer; and

v. Amended quarterly returns are required for any period where the claim for refund results in the change of any of the figures previously reported. The amended return(s) should be filed online at the time of submitting a refund claim.

4. Refund claims of sales and use tax with 25 or more separate transactions or credit memoranda must be filed with a computer spreadsheet. A computer spreadsheet is a computer program that arranges numerical and textual data into a table of rows and columns. The computer spreadsheet must display information for each transaction that is included as the subject of the refund claim.

i. The spreadsheet must include, but is not limited to:

(1) The names of seller and customer;

(2) The location of the transaction (for example, delivered to Pennsylvania, shipped by carrier or customer pickup);

(3) The invoice number;

(4) The invoice date;

(5) The item sold/purchased;

(6) The amount of the sale/purchase subject to refund;

(7) The amount of sales tax or use tax claimed for refund; and

(8) A statement of the grounds for the claimed refund.

ii. The computer spreadsheet should be edit-locked and, for the purposes of this section, the Division will accept computer spreadsheets created with Excel or any other .xls file compatible computer spreadsheet application. The computer spreadsheet shall be submitted with the refund claim on a compact disc or similar medium in common use. Receipt of a computer spreadsheet without simultaneous or prior filing of Form A-3730 does not constitute the filing of a claim for purposes of statute of limitations.

(e) A taxpayer requesting a refund of a payment of an additional assessment of any tax pursuant to 54:49-14.b is required to use Claim for Refund of Paid Audit Assessment (Form A-1730).

(f) If there is no other established refund claim procedure or amended return for other State taxes paid in error, a Claim for Refund (Form A-3730) should be completed and submitted with a detailed explanation with supporting documentation.

(g) The refund claim shall set forth the taxpayer's name, address, identifying number, signature and a full narrative description of the claim. The narrative description shall set forth in detail each ground upon which a credit or refund is claimed and facts sufficient to apprise the Division of the exact basis thereof. Citations to relevant statutes, regulations and case law are not required but may be included if known. The statement of the grounds and facts shall be verified by a written declaration that it is made under the penalties of perjury. A refund claim must include documentation sufficient to establish an overpayment that entitles the taxpayer to a refund. If a refund claim does not contain sufficient information, the Division will provide the taxpayer with guidance on the information required to demonstrate an overpayment. If the taxpayer does not respond to the Division's request for documentation within 30 days of receipt of such guidance, the Division will deny the claim. The taxpayer may refile the claim, with documentation to substantiate the claim, within the applicable statute of limitations for filing refund claims, or file an appeal of the denial of the claim with the Conference and Appeals Branch within 90 days pursuant to 54:49-18. Alternatively, the taxpayer may file a direct appeal to the Tax Court of New Jersey within 90 days pursuant to 54:32B-21 and R.8:4-1.

N.J. Admin. Code § 18:2-5.8

Amended by 47 N.J.R. 3150(a), effective 12/21/2015