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Old 07-07-2008, 08:15 PM
 
Location: Central NJ
517 posts, read 1,636,709 times
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Today at work I heard of a new tax (already started or starting) for those who move out of NJ. Is this true?

That's crazy- why would anyone have to pay to leave. We all belong to the same country- no?

Please tell me what you know.
M
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Old 07-07-2008, 08:27 PM
 
Location: High Bridge
2,736 posts, read 8,560,843 times
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Negative.

The realty transfer tax (tax on the sale of a home) is the same whether you're moving in state or out of state. The whole being taxed on leaving NJ thing has been an ongoing rumor for some time now.
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Old 07-07-2008, 09:02 PM
 
Location: Central NJ
517 posts, read 1,636,709 times
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Thanks. The people who told me seemed so sure about it.

Good to know since my parents are leaving- would hate for them to have to pay this.
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Old 07-07-2008, 09:26 PM
 
Location: In My Own Little World. . .
3,238 posts, read 7,829,156 times
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Quote:
Originally Posted by MMTeacher View Post
Thanks. The people who told me seemed so sure about it.

Good to know since my parents are leaving- would hate for them to have to pay this.
I just moved from NJ to OK and paid the same transfer tax that I would have paid if I moved from Ewing, NJ to Middletown, NJ. There is no "exit" tax in NJ, even though you will talk to people who will swear they know numerous people who paid it.
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Old 07-07-2008, 09:38 PM
 
Location: GA
2,739 posts, read 9,363,714 times
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More here:
Vested Title Inc. | The New Jersey Realty Transfer Tax Calculator

The tax isn't about moving, it's about selling. If your parents are selling, they may have to pay it.
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Old 07-07-2008, 09:38 PM
 
Location: Central NJ
517 posts, read 1,636,709 times
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Is it a set amount or a percentage?
I didn't know about this.
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Old 07-08-2008, 05:35 AM
 
9,124 posts, read 32,160,499 times
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It's a percentage, which varies depending on the sales price of the house. What your friends are referring to as the "exit tax" is the practice of withholding estimated state tax on potential capital gains if the sellers' forwarding address is out of state. So, if your parents are moving out of state and they show a capital gain on the sale, their closing attorney will likely withhold the estimated amount of state tax they may owe on the capital gain. If they are remaining in NJ, the taxes won't be withheld- the idea is that the department of taxation doesn't want to be chasing people all over the country for taxes due on their home sales.
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Old 07-08-2008, 09:05 AM
 
Location: In My Own Little World. . .
3,238 posts, read 7,829,156 times
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If your parents are selling a house and moving out of state, they can avoid the tax at the closing if they are exempted under Federal law for tax on the capital gain. They would fill out form REP-3 which would give them the exclusion. You can see/download that form at: www.state.nj.us/treasury/taxation.
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Old 07-08-2008, 09:28 AM
 
9,213 posts, read 18,113,177 times
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There is a little known fee that becomes a de facto "exit tax."

When I moved out of NJ, I registered and insured my car in PA, and obtained my PA license. I thought that was it. I took my old NJ license tags and destroyed them. I had seen numerous people decorate their basement walls with old license plates, or just destroy them like I did.

Then after more than a year, my car insurance company called and said they learned that my NJ license was suspended. I hadn't had an NJ license in over a year, and I had never had a ticket, so I figured it was a mistake. I went to MVS in Trenton, and after waiting hours, I was told by a very rude person that I had never handed in my NJ license plates. I said I never heard of such a thing, and they said "It's in the Driver's manual." I replied that I hadn't had or needed a Driver's manual since I was 16 and passed my test, and do they know if this was in the 1986 Driver's manual?

They basically said that I had to pay a $200 fee (fine) for never handing in my old plates, or they would have police pull me over when I tried to leave and impound my car(!) I was so upset, I cried. I had never had even a ticket and had never done anythign wrong! I asked if I coukld pay and then appeal this, and the answer was no. There is no due process for this fine. So I was forced to pay $200, which, no matter what they call it, is a de facto "exit tax" from NJ.
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Old 07-08-2008, 09:40 AM
 
Location: High Bridge
2,736 posts, read 8,560,843 times
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Returning plates has been required for all vehicles for a long time now. This isn't a "defacto exit tax".
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