Does New Jersey Have a Minimum Franchise Tax?
No. New Jersey does not impose a separate franchise tax on LLCs. Instead, LLC income generally passes through to members under the Gross Income Tax Act (N.J.S.A. 54A:1-1 et seq.), taxed at individual rates up to 10.75%. Your main recurring LLC state cost is the $75 annual report filing fee due by your formation anniversary month each year. Corporations can still owe Corporation Business Tax and applicable minimum taxes under N.J.S.A. 54:10A-1 et seq.
What Taxes Apply to New Jersey LLCs?
Pass-Through Income Tax
New Jersey taxes LLC members on their distributive share of business income under N.J.S.A. 54A:1-1 et seq. Single-member LLCs are disregarded entities for federal tax purposes; multi-member LLCs are taxed as partnerships. Members report income on individual returns at graduated rates up to 10.75%. Nonresident members may face New Jersey withholding or composite-tax obligations.
Sales Tax
If your LLC sells taxable goods or services, you must register for and collect New Jersey's 6.625% sales tax. Register at https://www.nj.gov/treasury/revenue/gettingregistered.shtml.
Self-Employment Tax
Members pay federal self-employment tax on their distributive share of LLC income.
Annual Compliance Requirements
Your LLC must file an Annual Report by the last day of your formation anniversary month each year under N.J.S.A. 42:2C-26. The filing fee is $75. The report requires your business name, New Jersey business ID, mailing address, EIN, registered agent information, and principal business address.
Failure to file for two consecutive years results in inactive status or revocation of authority. Reinstatement requires filing all delinquent reports, paying a $75 reinstatement fee, and potentially a $25 registered-agent change fee.
Estimated Tax Payments
If you expect tax liability, estimated income tax payments are due April 15, June 15, September 15, and January 15. Nonresident members should consult the Division of Taxation regarding withholding obligations.
Next Steps
- Register for sales tax if applicable at https://www.nj.gov/treasury/revenue/gettingregistered.shtml
- File your first Annual Report by the last day of your formation anniversary month in the year after your LLC is formed
- Contact the New Jersey Division of Taxation at https://www.nj.gov/treasury/taxation/ for income tax and withholding guidance
This is general information, not legal advice.