N.J. Admin. Code § 18:24-2.3

Current through Register Vol. 56, No. 24, December 18, 2024

Section 18:24-2.3 - General requirements

(a) A true copy of all sales slips, invoices, receipts, statements, memoranda of price, cash register tapes, or guest checks issued to any customer by a seller who is required to be registered pursuant to the provisions of the Sales and Use Tax Act, N.J.S.A. 54:32B-1 et seq. and records of every purchase, both retail and wholesale, must be available for inspection and examination at any time upon demand by the Director or his or her duly authorized agent or employee and shall be preserved for a period of four years from the filing date of the quarterly period for the filing of sales tax returns to which such records pertain.

(b) Photocopies or electronically stored copies of general books of account, such as cash books, journals, voucher registers, ledgers, etc., are not acceptable in lieu of original records. However, photocopies or electronically stored copies of supporting records of details, such as sales invoices, purchase invoices, credit memoranda, etc., may be maintained provided the following conditions are met:

1. Appropriate facilities are provided for preservation of the copies for the periods required.

2. Copies are indexed, cross referenced, labeled to show beginning and ending numbers or beginning and ending alphabetical listing of documents included, and are systematically filed.

3. The taxpayer agrees to provide transcriptions of any information contained in copies, which may be required for purposes of verification of tax liability.

4. Proper facilities are provided for the ready inspection and location of the particular records, including computer hardware and software for viewing and copying the records.

(c) A posting reference and date of issuance must be on each invoice. Credit memoranda must carry a reference to the document evidencing the original transaction. Documents necessary to support claimed exemptions from tax liability, such as bills of lading and purchase orders, must be maintained in an order by which they can be readily related to the transactions for which exemption is sought.

(d) An automatic data processing tax accounting system must have built into its program a method of producing visible and legible records, which will provide the necessary information for verification of the taxpayer's tax liability.

1. Machine-readable data media, such as punch cards, magnetic tape, and disks are deemed to be records within the meaning of N.J.S.A. 54:32B-16 and must be retained in accordance with said statute.

2. Automatic data processing records must provide an opportunity to trace any transaction back to the original source or forward to a final total. If printouts are not made of the transaction details at the time they are processed, then the system must have the ability to reconstruct these transactions.

3. A general ledger with source references will be maintained to coincide with financial reports for tax reporting periods. The general ledger should coincide with the financial reports. In cases where subsidiary ledgers are used to support the general ledger accounts, the subsidiary ledgers should also be maintained periodically.

4. The seller's records should be designed so that the details underlying the summary accounting data may be identified and made available on request. The system should be so designed that supporting documents, such as sales invoices, purchase invoices, credit memoranda, etc., are readily available.

5. A description of the automatic data processing portion of the accounting system should be available. The statements and illustrations as to the scope of operations should be sufficiently detailed to indicate the following:

i. The application being performed;

ii. The procedures employed in each application (which, for example, might be supported by flow charts, block diagrams, or other description of the input or output procedures); and

iii. The controls used to ensure accurate and reliable processing.

6. Important changes, together with their effective dates, should be noted in order to preserve an accurate chronological record.

N.J. Admin. Code § 18:24-2.3

Amended by 48 N.J.R. 824(a), effective 5/16/2016