Date: April 22, 2022Attorney: Martin D. Hauptman

The New Jersey Division of Taxation has advised that because the presumption in New Jersey is that a lump sum charge that consists of taxable and nontaxable items is subject to tax, retail sales of COVID-19 test kits are taxable. The test kit is presumed taxable because it contains an exempt reagent and other taxable components. The purchase of a COVID-19 test kit that is reimbursed by the federal or New Jersey State government is not exempt under the Sales and Use Tax Act. Purchases of test kits directly by the federal or New Jersey State government are exempt. (N.J. DIv. of Taxation, Tax Guidance, 03/04/2022.) Martin D. Hauptman, Esq., Partner in the Tax Law department at Mandelbaum Barrett PC is available to answer any questions you may have.

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