| Since, you are a sole proprietorship and I am assuming a cash basis taxpayer in NJ, any deposits received would be construed as income. Thus, you would have income against which you will be allowed deductions that are related to business expenses.
The income less business expenses will result in taxable income that would be reported on schedule C of the tax return. This means that you would be required to make quarterly estimated tax payments to the IRS and the State of NJ.
So, as such, there is no tax to be taken out or withheld at time of the payments received from your customer. The taxes are paid on a quarterly basis both to the IRS and State of NJ. Your CPA can figure the tax payments that would be required. | 
