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New Jersey Capitulates to Amazon

  • Feb 22, 2012 | Susan McLain

UPDATE: March 16, 2012. According to Tax Analysts, A 2608 has passed the New Jersey Assembly 70 - 7. In addition, they approved Resolution 69 (AR 69) calling on Congress to pass some form of remote seller legislation regarding sales tax collection.

Just as Tennessee’s legislation that passed the House enables Amazon to legally place fulfillment houses without incurring the liability to collect and remit sales taxes for a specified amount of time, New Jersey has started General Assembly Bill 2608 (A2608) down the road for approval.

New Jersey’s Internet sales tax bill “with a twist” specifically defines the following requirements be met in order to qualify as a business who is “…deemed not a seller for the purposes of the tax imposed by the Sales and Use Tax Act.”:

  • “…places one or more customer operations and processing facilities in service within this State on or after January 1, 2012 but before September 1, 2013;
  • makes, or causes to be made, a capital investment of not less than $65,000,000 within this State on or after January 1, 2012 but before December 1, 2013;
  • Creates not fewer than 1,500 full-time jobs within this State on or after January 1, 2012 but before December 1, 2013;
  • And, after meeting the full-time job creation requirement provided by this subsection, maintains not fewer than 1,500 full-time jobs within this State for at least fifty-nine months following the month in which the full-time job creation requirement provided by this subsection is first met.”

The bill also allows that the company deemed not a seller for sales and use tax purposes must inform the customer that their online purchase did not have sales tax charged and is subject to use tax. They must include a link to the New Jersey Department of Revenue website where the taxpayer can file their use tax.

The Legislature also has written in requirements for commuting and transportation needs of employees of any said company that fits their description in the bill. In addition, penalties will be required if the company fails to comply with all the requirements for the duration noted in the bill. This bill also defines a company as having nexus (physical presence) when they have affiliates in the state similar to New Jersey Senate Bill S905, submitted earlier in the year, which does not provide for a temporary exemption for companies meeting the above characteristics. 

The expiration date of the deferral of sales and use tax collection obligations for a business that qualifies as a seller for nexus if September 1, 2013. New Jersey’s law with a twist.

For additional research, here is the list of current bills before the New Jersey legislature that address Internet sales tax: Assembly Bill 2003 (A2003), Senate Bill 1305 (S1305), Senate Bill 905 (S905), and the latest Amazon focused bill, Assembly Bill 2608 (A2608).

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Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”