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Division of Taxation

Notice to Cable Television Service Providers Customer Premises Equipment

The New Jersey Sales and Use Tax Act imposes tax on “receipts from every retail sale of tangible personal property.” N.J.S.A. 54:32B-3(a). A “retail sale” is defined to include “any sale, lease or rental for any purpose, other than for resale, sublease, or subrent.” N.J.S.A. 54:32B-2(e). A "lease or rental” is defined as “any transfer of possession or control of tangible personal property for a fixed or indeterminate term for consideration.” N.J.S.A. 54:32B-2(aa).

Based on the above provisions, cable television service providers are required to collect and remit New Jersey sales tax on their charges for customer premises equipment, such as converters, remotes, adapters and modems. Each monthly charge constitutes a rental of tangible personal property. The taxable equipment charges are determined based on the separately stated charge for the customer premises equipment. If the equipment is instead bundled with the cable television service, the tax is imposed based on the consideration for the equipment as reflected in the provider’s books and records for any customer premises equipment that is bundled with the non-taxable cable television service, pursuant to N.J.S.A. 54:32B-2(oo)(4).

Note: The requirement to collect and remit sales tax as described in this notice also applies to satellite television service providers who provide customer premises equipment.

Last Updated: Tuesday, 02/25/20