snopes.com  

Go Back   snopes.com > Urban Legends > Business

Reply
 
Thread Tools Display Modes
  #1  
Old 10 September 2007, 09:29 PM
snopes's Avatar
snopes snopes is offline
 
Join Date: 18 February 2000
Location: California
Posts: 108,507
Icon605 New Jersey exit tax

Comment: there is this rumor that keeps circulating around Monmouth county
New Jersey, that when selling your house and relocating out of state, that
you have to pay a New Jersey Exit Tax - up to 1% of the sell price....what
is the real deal?
Reply With Quote
  #2  
Old 10 September 2007, 09:53 PM
DarkDan's Avatar
DarkDan DarkDan is offline
 
Join Date: 12 October 1972
Location: Philadelphia, PA
Posts: 4,790
Default

They're probably talking about the Realty Transfer Fee, which applies to moving out of state AND in state.

Dark "Welcome to Jersey! Now get out." Dan
Reply With Quote
  #3  
Old 19 October 2007, 01:37 PM
summerdaisy
 
Posts: n/a
Default

I've been lurking on these boards for quite some time now, and this topic (and lack of response) is what's prompting me to finally make my first post.

I work for a real estate title insurance company in New Jersey, and I can verify this rumor is true - not just for Monmouth County, but all of New Jersey, and it's not the Realty Transfer Fee that's being referenced.

Several years ago, the State of New Jersey began requiring all property owners to execute a special tax form that must be attached to all deeds upon sale of the property, or the deed would be rejected by the recording office. There is the Seller's Residency Certification/Exemption (form GIT/REP3) for NJ resident taxpayers and contains eight exemption choices allowing for any taxes on the gain to be paid when filing NJ income taxes. Then there is the NonResident Seller's Tax Declaration (form GIT/REP1) for out-of-state residents who MUST pay a minimum 2% tax to NJ for the sale of any property. (Note that this 2% minimum is on the consideration listed on the deed - NOT 2% on the gain on the property. So if a Pennsylvania resident bought a summer property at the Shore for $100,000 in 1990 and sold it today for $500,000 he would be required to pay a minimum $10,000 tax to NJ at the time of the deed transfer (2% of $500,000) - the amount would not be calculated based on his $400,000 gain. He would have to file a non-resident tax return to recoup any amount overpaid, from what I understand of it.)

Now, up until earlier this year, many New Jerseyans selling their homes and moving permanently out of state were utilizing the GIT/REP3 (Resident) form, based on the assumption they would be filing New Jersey income taxes for that tax year and would pay the taxes (if any) on the sale of the property at that time. As of July 2007, they can no longer do so. The state Division of Taxation has "amended" their position that, in order to utilize the Resident form, the seller MUST be moving to a New Jersey address as of the date of deed transfer, or they must use the NonResident (GIT/REP1) form, thereby requiring them to pay the minimum 2% of the deed consideration directly to the state. I can only surmise that the sheer volume of residents fleeing to greener pastures - plus seeing an opportunity to further bloat the coffers - is what prompted NJ in its infinite wisdom to "clarify" their filing instructions

So, while it's not an "exit tax" per se, that is essentially what it has become - one last way for the Garden State to stick it to you on your way out the door.

Hope this sheds some light on the issue.
Reply With Quote
  #4  
Old 20 October 2007, 03:27 AM
Sara@home's Avatar
Sara@home Sara@home is offline
 
Join Date: 18 March 2004
Location: Reading, PA
Posts: 12,469
Default

But is it truly an exit tax or just a way of assuring that the taxes due are paid? Aren't you saying that if the seller pays more with the 2% than he would owe by taxing the capital gains, he would get a refund? All he has to do is make sure he files his NJ1040-NR and he gets a refund.

There's a big difference between NJ assuring that the taxes are paid, as this sounds like it is, than putting an additional tax on people who leave the state.

Maryland retains part of the sale proceeds of properties owned by out-of-staters. It's withholding to be applied towards any capital gains. Any overpayment is refunded when the seller files a MW506NRS. Sounds like NJ does the same thing.
Reply With Quote
  #5  
Old 20 October 2007, 03:13 PM
Steve Eisenberg Steve Eisenberg is offline
 
Join Date: 15 October 2001
Location: Philadelphia, PA
Posts: 11,841
Default

I thought this thread was going to be about the toll bridges over the Delaware and Hudson, most all of which only only charge you in the going-out-of-New-Jersey direction.
Reply With Quote
  #6  
Old 20 October 2007, 03:25 PM
keokuk's Avatar
keokuk keokuk is offline
 
Join Date: 25 July 2006
Location: Montclair, NJ
Posts: 4,233
Default

Quote:
Originally Posted by Steve Eisenberg View Post
I thought this thread was going to be about the toll bridges over the Delaware and Hudson, most all of which only only charge you in the going-out-of-New-Jersey direction.
I think they do that for traffic purposes. They used to make people pay both ways, and then someone realized, "Wait a minute. If we only use tolls for outgoing bridges and tunnels, and do it for all outgoing bridges and tunnels, then we can just double the price and get rid of half the tolls."
Reply With Quote
  #7  
Old 21 October 2007, 02:59 AM
jayjaybear jayjaybear is offline
 
 
Join Date: 07 February 2004
Location: Lancaster, PA
Posts: 683
Default

Quote:
Originally Posted by Steve Eisenberg View Post
I thought this thread was going to be about the toll bridges over the Delaware and Hudson, most all of which only only charge you in the going-out-of-New-Jersey direction.
No, that's just us Pennsylvanians trying to keep the riff-raff out...
Reply With Quote
  #8  
Old 22 October 2007, 02:30 AM
Der Jägermeister
 
Posts: n/a
Default I'd pay twice that, easy!

--->2% to leave New jersey? Yous guys are totally lowballing yourselves.
Reply With Quote
  #9  
Old 11 March 2011, 06:35 PM
coloradorockies
 
Posts: n/a
Default

There are quite a few ways to get out of New Jersey without paying a toll. You can cross the bridge on I-95 (not the NJ Turnpike) from NJ into PA. If you take I-287, the Palisades Parkway, or one of the dozens of roads that cross the northern border into New York state, there is no toll either.

However most people do pay a toll when they leave NJ. You have to pay to cross one of the tunnels and bridges into New York City. You also have to pay a toll when you cross most of the bridges over the Delaware River into Pennsylvania or Delaware.
Reply With Quote
  #10  
Old 14 March 2011, 05:16 PM
Phantom's Avatar
Phantom Phantom is offline
 
Join Date: 20 May 2008
Location: Boston, MA
Posts: 580
Devil

Quote:
Originally Posted by Der Jägermeister View Post
--->2% to leave New jersey? Yous guys are totally lowballing yourselves.
I agree! There's a reason I called NJ the Hellfire State while I lived there. Wasn't sad to see the back of that place! (Some areas of NJ are probably nice, but I didn't like where I lived at all.)
Reply With Quote
  #11  
Old 14 March 2011, 05:24 PM
AnglRdr's Avatar
AnglRdr AnglRdr is offline
 
Join Date: 06 June 2002
Location: Nashville, TN
Posts: 50,682
Default

Welcome to the ULMB, coloradorockies!
Reply With Quote
  #12  
Old 15 March 2011, 01:31 AM
Zorro's Avatar
Zorro Zorro is offline
 
Join Date: 02 May 2004
Location: New Jersey
Posts: 10,886
Default

Phantom, where did you live?
Reply With Quote
  #13  
Old 15 March 2011, 12:44 PM
Phantom's Avatar
Phantom Phantom is offline
 
Join Date: 20 May 2008
Location: Boston, MA
Posts: 580
Devil

Quote:
Originally Posted by Zorro View Post
Phantom, where did you live?
Ocean Township, right by Asbury Park. I disliked the area mostly because the kids I went to school with weren't very nice. I also wasn't fond of many of our neighbors, though there were a few nice ones. There also wasn't very much to do in the area, and it was virtually impossible to get around without a car. These issues definitely aren't limited to NJ, but it was why I didn't like living there. My best friend shared my views, so together we came up with the Hellfire State name.

Now I live right by the bustling city of Boston with plenty to do, and no shortage of transportation. We have cars but don't feel tied to them. The people in the neighborhood maybe could be a bit nicer, but we do have a few nice neighbors. DS1 and 2 seem happy with their classmates.

I don't mind going back to NJ for the occasional visit, but I sure wouldn't want to live there again (unless the criteria I mentioned get addressed.)
Reply With Quote
  #14  
Old 17 March 2011, 12:23 AM
Zorro's Avatar
Zorro Zorro is offline
 
Join Date: 02 May 2004
Location: New Jersey
Posts: 10,886
Default

Oh, that area is quite different from where I live, in Morris County, except for the virtually impossible to get around without a car part. That covers pretty much the entire state, I'll grant you. NJ Transit, IME, sucks. I'd rather drive into Manhattan than use NJ Transit again.
Reply With Quote
  #15  
Old 19 March 2011, 12:21 PM
Der Induktionator's Avatar
Der Induktionator Der Induktionator is offline
 
Join Date: 18 April 2005
Location: Luzern, Switzerland
Posts: 1,296
Default

Personally, I found the NJ Transit trains in and out of NYC pretty good (Morris line mid-town express to NY Penn Station from Lake Hopatcong or Dover).
Never tried busses, though. Being used to Swiss public transportation I would probably be disappointed.

From NJ to PA without toll: The Philippsburg-Easton local traffic bridge is free, and locals call it "the Free Bridge". I'm not sure if there's still toll on the US22 bridge. The Riegelsville bridge (under renovation recently) is free, it has a speed limit of (I think) 15 MPH, thought it should be about 5 MPH, and a large pickup truck is probably at the weight limit.
I think most of the local bridges further south are free too, maybe it's mostly interstates or other highways that are toll.
Reply With Quote
  #16  
Old 19 March 2011, 10:14 PM
Avril's Avatar
Avril Avril is offline
 
Join Date: 07 August 2002
Location: Princeton, NJ
Posts: 9,506
Default

New Jersey Transit service isn't bad, but it's outrageously expensive, especially now.
Reply With Quote
  #17  
Old 20 March 2011, 02:08 AM
DarkDan's Avatar
DarkDan DarkDan is offline
 
Join Date: 12 October 1972
Location: Philadelphia, PA
Posts: 4,790
Default

Quote:
Originally Posted by Phantom View Post
Ocean Township, right by Asbury Park
Howdy ex-neighbor! I was raised in Tinton Falls and my parents still live there. I still like visiting there on occasion, but yeah after living in a major city for a while, the suburbs are boring.
Reply With Quote
  #18  
Old 18 April 2011, 04:55 PM
RumorMilling
 
Posts: n/a
Default

Quote:
Originally Posted by snopes View Post
Comment: there is this rumor that keeps circulating around Monmouth county
New Jersey, that when selling your house and relocating out of state, that
you have to pay a New Jersey Exit Tax - up to 1% of the sell price....what
is the real deal?
Move to Alaska! They will help you offset the cost with the 2000 dollars in cash they give you to move there
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On

Forum Jump


All times are GMT. The time now is 04:16 AM.


Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2014, vBulletin Solutions, Inc.