New Jersey Commercial Gas – Is It or Isn’t It Taxable?

New Jersey has issued a Technical Advisory Memorandum (TAM-2012-3) which addresses the taxability of sales of commercial gases.  Under New Jersey Statutes, sales of tangible personal property are taxable unless a valid exemption exists.  Although, gases are deemed taxable because they fall within the definition of tangible personal property, the law provides an exemption from sales tax for “sales of gas other than natural gas, water, steam, or fuel delivered to consumers through mains, lines, pipes, or in containers or bulk” (N.J.S.A. 54:32B-8.7).  New Jersey considers sales of commercial gases, such as oxygen, acetylene and argon, to fall within the exemption from sales tax.  

For example, a distributor of various gases including oxygen, acetylene, argon, various gas mixtures containing argon, and shielding gases used in the welding process were considered to be within the scope of the exemption above, and are exempt from sales tax.  To claim the exemption, the purchaser must issue a properly completed Exempt Use Certificate (Form ST-4) to its supplier (N.J.L.R.: 2012-2-SUT).


Andria Siciliano is a Director in the State and Local Tax Group with expertise in state and local sales and use taxation, plus payroll, property and income tax compliance and consulting.

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