24 Apr I was charged sales tax for home warranty services. Was that correct?

Q. I am a New Jersey resident. I have a policy with a company based in Tennessee for home warranty services. Their fee per call for service is stated as $125 on the agreement in addition to the quarterly premium. They charged sales tax on the $125 fee. Is this legal?
— Taxed enough

A. Every state has different rules for sales tax.

New Jersey’s Division of Taxation publishes a comprehensive list of what’s taxable and what’s not in the state.

There are several items in the guide that seem to fit your description: “Taxable Home Repairs (except residential heating systems)” and “Maintenance Agreements (in general)” and “Extended Warranty Agreements” are all taxable.

But if you’re ever wrongly charged sales tax and the company won’t make it right, you can ask the state for a refund. The claim for refund, Form A-3730, must be filed with documents, such as invoices, receipts, proof of payment of tax, and exemption certificates, the state says.

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This story was originally published in April 2024.

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