When are storage-in-transit charges for interstate household-goods moves exempt from New Jersey Sales and Use Tax?

Plain-English summary

For interstate moves, New Jersey tied the storage-in-transit exemption to the period in the carrier's tariff or customer contract rather than a fixed statewide limit.

Ordinary storage charges were taxable, while charges for transporting property were exempt. Storage in transit remained part of the interstate movement when the goods stayed in the stream of commerce instead of coming to rest in New Jersey.

The Division replaced its earlier 60-day and then 90-day policies with this rule:

• if storage did not exceed the specific period in the carrier's tariff or contract, the storage-in-transit charge was exempt;
• if storage exceeded that period, the entire storage charge was taxable; and
• if the tariff or contract gave no specific period, the Division deemed the storage-in-transit period to be 90 days.

All storage charges connected with intrastate moves were taxable in full because the interstate-commerce rationale did not apply.

The TAM expressly superseded earlier Division guidance, including the March/April 1982 State Tax News article.

What this means for you

Interstate movers

State the storage-in-transit period in the tariff or customer contract and monitor when it expires. Going beyond that period made the full charge taxable under the TAM.

Customers

Do not assume every move receives an automatic 90-day exemption. The contract or tariff controlled when it stated a period; 90 days was only the default when it did not.

Intrastate movers

The TAM treated all storage charges for moves wholly within New Jersey as taxable.

Common questions

Q: Was New Jersey's old 60-day rule still controlling?
A: No. The TAM superseded that guidance.

Q: What controlled the exempt period for an interstate move?
A: The specific storage-in-transit period in the carrier's tariff or customer contract.

Q: What if the documents did not specify a period?
A: The Division used 90 days.

Q: What happened if storage exceeded the allowed period?
A: The full storage charge became taxable.

Q: Did the rule exempt storage for intrastate moves?
A: No. Those storage charges were taxable in full.

Citations and references

• N.J.S.A. 54:32B-3(b)(3) — storage services
• N.J.S.A. 54:32B-8.11 — transportation of property
• 49 U.S.C. § 13702(c)(1) — household-goods carrier tariffs
• 49 U.S.C. § 14501(c)(1) — motor-carrier preemption provision discussed in the TAM

Source

• Landing page: https://www.nj.gov/treasury/taxation/tam-pubs.shtml
• Original PDF: https://www.nj.gov/treasury/taxation/pdf/pubs/tams/tam18.pdf

Original ruling text

Storage-in-Transit
TAM 2011-18 – Issued July 28, 2011
Tax: Sales and Use Tax
In general, unless property is held for resale (i.e., inventory), charges for storage services (i.e.,
receiving, handling or forwarding the property on behalf of the lessee) are subject to Sales Tax.
See N.J.S.A. 54:32B-3(b)(3). The tax is imposed on the charges made for the safekeeping of
tangible personal property by storage.
Charges for moving property from one location to another are exempt from tax as a charge for
the transportation of property. N.J.S.A. 54:32B-8.11. For New Jersey Sales Tax purposes, SIT is a
concept centered on the goods being in the stream of commerce rather than “coming to rest” in
the state such that would trigger a tax obligation on the storage.
Originally, the Division took the position that so long as the period of storage did not exceed 60
days, the storage was not subject to sales or use tax. If the period of storage exceeded 60 days,
the storage charge for the full period became taxable. This position was published in the
Division’s March/April 1982 State tax News. Sometime in 2007, the Division was informed by an
industry representative that the Professional Movers Commercial Relocation Tariff, which
governs the movement of household effects, allows 90 days for SIT. Upon receipt of this
information, the Division revised the SIT policy accordingly. The 60 and 90 day time frames were
based on the Division’s understanding as far as the time frame authorized for SIT in the federal
tariff.
Industry representatives have informed the Division that the 90 day time frame for SIT was not a
requirement under federal law. There has been a general trend expressed in federal statutes,
specifically over the last 25 years, toward deregulation of the motor carrier industry to promote
competitive services.
The Federal Interstate Commerce Commission Termination Act of 1995 (“ICCTA”) requires
interstate household goods carriers to publish tariffs containing their rates and service rules. 49
USC 13702(c) (1). The Federal statute permits carriers to establish SIT period in their tariffs and
contracts. In addition, 49 USC 14501(c)(1) states that “a State…may not enact or enforce a law,
regulation, or other provision having the force and effect of law related to a price, route, or
service of any motor carrier…with respect to the transportation of property.”
Although the Division does not consider these federal provisions to directly affect the ability of a
state to enact and enforce a state sales tax on the storage of tangible personal property, the
Division recognizes that Federal law controls the movement of goods in interstate commerce.
Therefore, as long as the period of storage in transit does not exceed the time frame specified
by the carrier in its specific tariff and/or contract with the customer, the charge for the storage in
transit is not subject to sales or use tax. If the period of storage exceeds the time frame specified
by the carrier in their specific tariff and/or contract with the customer, the storage charge for the
full period is subject to tax since the goods have come to rest in New Jersey. If a contract or

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tariff does not state the specific SIT period, the Division deems the period of SIT to be 90 days.
Storage charges for all intrastate moves are subject to tax in full since there are no interstate
commerce implications involved with such transportation services.
The information is this Technical Advisory Memorandum supersedes other published guidance,
including internal memos and external information, such as the State Tax News March/April
1982 article, issued by the Division.

Note: A Technical Advisory Memorandum (“TAM”) is an informational statement of the law,
regulations, or Division policies. It is accurate on the date issued. Subsequent changes in the law
or regulations, judicial decisions or changes in Division policies could affect the validity of the
information presented in a TAM.

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