Legal Question in Tax Law in New Jersey

NJ Sales Tax

Is there a statute of limitations for NJ Sales tax? I just got an invoice out of the blue for a business that hasn't been in existence for years and I'm not even a resident of the state anymore.

Asked on 2/14/07, 4:37 pm

2 Answers from Attorneys

Ronald Cappuccio Ronald J. Cappuccio, J.D., LL.M.(Tax)

Re: NJ Sales Tax

First, the Statute of Limitations only begins to run when the tax return is filed. It is generally 4 years. You should immediately contact a tax attorney to help you straighten this out.

I hope this helps!

Ron Cappuccio

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Answered on 2/14/07, 8:38 pm

Chip Browder Hubbard, Smith, McIlwain, Brakefield & Browder, PC

Re: NJ Sales Tax

Assuming your business filed periodic sale tax returns and made timely deposits, under Alabama law there is a 3 year statute of limitations on unpaid taxes, unless the underpayment was quite large percentage-wise, I believe that is 25% off top of my head. I would assume that a similar time limit applies under NJ law, but can not say for sure. Who was your accountant back in NJ? They should be a ready source as to this issue.

The next problem NJ has, assuming the assessment has been timely made within the applicable statute of limitations, is their difficulty in coming into Alabama to collect. They must come into local circuit court of the county where you currently reside and "domesticate" that judgment against you at which time you possibly could fight the tax bill -- I am a tax attorney, but not a litigation lawyer, so you MUST consult a local "courthouse" attorney to confirm your rights and what opportunity, if any at all, you would have to fight the tax collection action once they (NJ reveneers)come into Alabama to try and collect.

What is the amount at issue? It may not be worth their while and time and trouble to come into Alabama to collect this? I have had some Alabama tax officials tell me (of course, strictly off the record) that they are forced to "backburner" out-of-state collection efforts due to a lack of funding and manpower.

However, DO NOT simply sit back and do nothing. Talk to a local litigator, or if we can be of further assistance, please let us know -- we can put you in touch with some local litigators here to advise you in this regard.

Good luck, and have a blessed day and rest of the week. Kindest regards, Chip

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Answered on 2/15/07, 1:19 pm

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