I believe this is the form you want:
http://www.state.nj.us/treasury/revenue/forms/njreg.pdf
When you are registered for sales tax, you are entitled to make tax-exempt purchases. This means that if you use an in-state replication plant, you would give them an exemption certificate with the tax ID# NJ gives you, and they would not charge you sales tax.
If you are using an out-of-state plant, they wouldn't charge NJ tax in the first place, so an exemption certificate is not necessary.
The area that threw me were the questions on employees vs. partners. Our first 200 > 300 sold CDs are to cover production/mastering costs, as agreed to by the band (I shelled out all the money up front, for those costs.) I'm our authorized agent, of sorts; & I'll be selling the CD online through our website...& after the initial payback I'll be equally divvying up the proceeds to the other band members (also by mutual agreement.) But they're not employees; & I shouldn't list them as partners in the business until they begin to collect as partners.
Technically, you have formed a partnership; even if the profit-sharing is not a simple equal share allocation. In a perfect world, you would have a written partnership agreement, then you would request a Federal tax ID # for the partnership, file your state and federal returns under the partnership name, etc. This is really more of an income tax issue than sales tax though, NJ just wants to know who will be on the hook if you collect taxes you don't remit, or fail to collect taxes.
But when you file your federal income tax return, if you decide to treat it as your kitty that your bandmates are paid out of as independent contractors, then you will need to show all of the revenue, and the payments to the bandmates as expenses, and potentially you will also have to issue them 1099s.
The other route of filing a partnership return and each bandmate including their allocated share of profits on their 1040s is not that simple either . . . wait until your bandmates figure out they can't file the EZ anymore
There was also a question on the form as to when exactly the first sale will take place...which I have no way of knowing...so what I'm going to do is; attach two riders w/ the form explaining the co-band members thing & the "who knows if & when CDs will sell" thing.
In reality, you will likely confuse the poor hapless state revenue employees. I don't want to insult anybody, but their job description pretty much requires they think inside the box. Meaning that if you do such a thing, you could significantly delay your registration.
Besides, they cannot decide for you whether you are a sole proprietor with independent contractor bandmates, or a partnership. That is a legal question they cannot resolve. If you force them to resolve it, they will probably refuse your application until all interested parties sign away their lives to joint and several liability for sales taxes.
Remember, all NJ wants at this point is its 7% (or whatever the sales tax rate is there, I don't know). If they have their 7%, they don't care who gets the rest of the money.
As for first sale, just list when you will first list it for sale on your site.
