New Jersey LLC Taxes: What You Need to Pay
What taxes does a New Jersey LLC need to pay? Learn about pass-through income tax, sales tax, payroll taxes, the annual report fee, and when the Corporation Business Tax applies.
Bizee Editorial Staff
Editorial Team
New Jersey LLC tax quick facts
Filing fee: $125 (LLC formation fee to the NJ Division of Revenue and Enterprise Services)
Processing time: [PROCESSING_TIME]
State agency: New Jersey Division of Revenue and Enterprise Services; New Jersey Division of Taxation
Annual report due: Last day of the month in which the LLC was originally formed, filed annually
State tax rate: Pass-through: NJ Gross Income Tax at individual rates; Corporation Business Tax: applicable corporate rates if LLC elects corporate treatment; Sales and Use Tax: 6.625% general rate; Annual report fee: $75
New Jersey LLC tax overview
A New Jersey LLC typically pays no income tax at the entity level. Instead, profits pass through to the members, who report their share on their own New Jersey Gross Income Tax returns and federal returns. Depending on your business, you may also owe sales tax, payroll taxes, and an annual report fee.
How your LLC is taxed by default
Your LLC's tax treatment depends on how many members it has and whether you've made any elections with the IRS. Most New Jersey LLCs keep the default classification, which means the LLC itself doesn't file or pay income tax — the income flows to the owners instead.
Single-member LLC
A single-member LLC is treated as a disregarded entity by the IRS. You report business income and expenses on Schedule C of your personal federal return. New Jersey follows the same treatment for Gross Income Tax purposes — the LLC doesn't file its own income tax return.
Multi-member LLC
A multi-member LLC is treated as a partnership for federal tax purposes by default. The LLC files an informational return (Form 1065) and each member receives a Schedule K-1 showing their share of income. Members then report that income on their own federal and New Jersey returns.
LLC taxed as a corporation
If your LLC elects to be taxed as a C corporation by filing IRS Form 8832, New Jersey will follow that classification and subject the LLC to the Corporation Business Tax instead of pass-through treatment. An S corporation election requires both IRS Form 2553 and New Jersey Form CBT-2553-R.
New Jersey gross income tax
Members of a New Jersey pass-through LLC pay New Jersey Gross Income Tax on their share of the LLC's New Jersey-source income. The LLC itself doesn't pay this tax — each member reports their distributive share on their own New Jersey individual return using the state's graduated rate schedule.
Most LLC members also owe federal self-employment tax on their share of net earnings — currently 15.3% on the first $168,600 of net self-employment income (2024 threshold), covering Social Security and Medicare. You report this on your federal return alongside your income tax.
New Jersey also has a Pass-Through Business Alternative Income Tax (BAIT) that eligible pass-through entities can elect to pay at the entity level. This is an optional election, not a default requirement, and it's worth discussing with a tax professional to see if it makes sense for your situation.
Corporation Business Tax
The New Jersey Corporation Business Tax (CBT) applies to LLCs that have elected to be taxed as a C corporation or S corporation. It doesn't apply to LLCs that keep the default pass-through classification. If your LLC has made a corporate election, it files CBT returns and pays tax on its New Jersey taxable income.
New Jersey describes the CBT as a franchise tax on domestic corporations for the privilege of existing under New Jersey law, and on foreign corporations for doing business or deriving receipts from New Jersey sources. CBT returns are filed electronically through the Division of Taxation's online portal.
Sales and use tax
New Jersey imposes a Sales and Use Tax at a general rate of 6.625% on most retail sales of tangible personal property, specified digital products, and certain services. If your LLC sells taxable goods or services in New Jersey, you're responsible for collecting this tax from customers and remitting it to the Division of Taxation.
The tax applies when the buyer takes possession of taxable property in New Jersey, taxable property is delivered to a New Jersey address, or taxable services are performed in New Jersey. An LLC with physical presence in the state — employees, an office, or inventory — generally has nexus and must collect and remit sales tax on taxable sales. Not all goods and services are taxable, so check the Division of Taxation's guidance for your specific product or service category.
Payroll and employer taxes
If your LLC has employees in New Jersey, you'll need to register as an employer and handle several payroll tax obligations. New Jersey payroll taxes go beyond federal withholding — the state has its own withholding requirements plus mandatory contributions that catch some new employers off guard.
- Register as an employer with the New Jersey Division of Revenue and Enterprise Services by filing Form NJ-REG through the state's Online Business and Employer Registration system
- Withhold New Jersey state income tax from employee wages using Form NJ-W4 (Employee's Withholding Allowance Certificate) and remit withholdings using Form NJ-927
- Pay and report New Jersey Unemployment Insurance (UI) contributions as an employer tax, and withhold employee UI contributions, through the New Jersey Department of Labor and Workforce Development
- Withhold and remit employee contributions for state Temporary Disability Insurance (TDI) and Family Leave Insurance (FLI) from employee wages
- Withhold and match federal FICA taxes — 7.65% from the employee and 7.65% from the LLC as employer, totaling 15.3% — covering Social Security and Medicare
Annual report and filing fees
Every New Jersey LLC must file an annual report with the New Jersey Division of Revenue and Enterprise Services. The filing fee is $75 per year. The report is due on the last day of the month in which your LLC was originally formed — so if you formed in March, your annual report is due every March 31.
Annual reports are filed online through the State of New Jersey Annual Reports portal. Additional processing fees may apply depending on your payment method. This is a compliance filing, not a tax return — but missing it can put your LLC's good standing at risk.
Tax registration and EIN
Forming your LLC and registering for taxes are two separate steps in New Jersey. After forming your LLC with the Division of Revenue, you need to separately register for state tax purposes by filing the Business Registration Application (Form NJ-REG) through the state's online Business and Employer Registration system.
Most New Jersey LLCs also need a federal Employer Identification Number (EIN) from the IRS before or during state tax registration — the EIN is requested on state registration forms and serves as the standard identifier for your business tax accounts. You can apply for an EIN at no cost at irs.gov/ein. The NJ-REG process covers registration for sales and use tax, employer withholding, and other applicable state business taxes through a single electronic filing.
FAQ
It depends on how your LLC is classified and whether you have employees or sell taxable goods. Most New Jersey LLCs are pass-through entities, so members pay New Jersey Gross Income Tax and federal income tax on their share of profits. The LLC itself doesn't pay state income tax. You may also owe sales tax (6.625% general rate), payroll taxes if you have employees, and a $75 annual report fee each year.
Not for most LLCs. New Jersey's Corporation Business Tax (CBT) is sometimes called a franchise tax, but it only applies to LLCs that have elected to be taxed as a C corporation or S corporation. If your LLC keeps the default pass-through classification, the CBT doesn't apply. Members pay Gross Income Tax on their share of profits instead.
Yes. New Jersey's general sales tax rate is 6.625%. If your LLC sells taxable goods, specified digital products, or taxable services in New Jersey, you're required to register for Sales and Use Tax, collect it from customers, and remit it to the Division of Taxation. Not every product or service is taxable, so check the Division of Taxation's guidance for your specific category.
Yes. New Jersey members of a pass-through LLC pay New Jersey Gross Income Tax on their share of the LLC's New Jersey-source income. The tax is reported on each member's individual New Jersey return using the state's graduated rate schedule. The LLC itself doesn't pay this tax — it passes through to the owners.
Yes, in most cases. If you expect to owe tax at the end of the year, you'll generally need to make quarterly estimated tax payments to both the IRS and the New Jersey Division of Taxation. This covers federal income tax, federal self-employment tax, and New Jersey Gross Income Tax. A tax professional can help you figure out the right payment amounts and due dates for your situation.
The annual report fee is $75. It's due each year on the last day of the month in which your LLC was originally formed. You file online through the State of New Jersey Annual Reports portal. Additional processing fees may apply depending on your payment method. Missing the deadline can put your LLC's good standing at risk.
The New Jersey Corporation Business Tax applies to LLCs that have elected corporate tax treatment. The CBT rate structure is set by the Division of Taxation and has changed in recent years. For the current rates, check the Division of Taxation's CBT page directly at nj.gov/treasury/taxation/cbt. Most LLCs don't pay CBT — it only applies if you've made a corporate election with the IRS.
Yes, in most cases. An Employer Identification Number (EIN) is required if your LLC has employees, has more than 1 member, or elects corporate tax treatment. Even single-member LLCs without employees are expected to have an EIN before registering for New Jersey state taxes, since the EIN is requested on the NJ-REG form. You can apply for an EIN at no cost at irs.gov/ein.
