New Jersey: Can Internet Taxing Be Even More Taxing?
- Internet sales tax
- Mar 7, 2012 | Susan McLain
UPDATE: March 16, 2012. According to Tax Analysts, Assembly Bill 2003 (nexus) and Assembly Bill 2608 (Amazon deal) have passed the New Jersey Assembly. In addition, they approved Resolution 69 (AR 69) calling on Congress to pass some form of remote seller legislation regarding sales tax collection.
After introducing Assembly Bill 2003, Senate Bill 1305, Senate Bill 905 and Assembly Bill 2608, New Jersey State Legislators Raymond J. Lesniak and Paul A. Sarlo have now introduced New Jersey Senate Bill 1762 regarding Internet sales taxes. This one is similar to Assembly Bill 2608 but with some higher capital improvement requirements:
- The business must “…place one or more customer operations and processing facilities in service within this State on or after January 1, 2012 but before December 1, 2013 (A2608 states before September 1, 2013);
- The business must have “…made or will make a capital investment of not less than $130,000,000 within this State on or after January 1, 2012 but before December 1, 2013 (A2608 required half that at $65 million); and
- The business must have “…created or will create not fewer than 1,500 full-time jobs on or after January 1, 2012 but before December 1, 2013; and will maintain not fewer than 1,500 full-time jobs for at least fifty-nine months following the month in which the full-time job creation demonstration required by this subsection is first met (this is the same as in A2608).
As with A2608, Senate Bill 1762 stipulates some commuting and transportation support by the business. It also creates a presence for online retailers who use affiliates in the state of New Jersey, and requires them to register and begin collecting and remitting sales tax on purchases made by New Jersey residents. In addition to affiliates, any subsidiary companies create nexus (physical presence) for an Internet retailer. Amazon has two such subsidiaries in New Jersey: Quidsi and Audible.
The temporary deferral for those businesses meeting the requirements noted above expires on July 1, 2013, so any business that qualifies must “…enter into an agreement with the director requiring the person to register as a seller and begin to collect the tax determined to be due on sales of taxable goods and services to purchasers in this State on or before the date the temporary deferral period expires (July 1, 2013) or the date certain other conditions specified by the agreement are met.”
Businesses that qualify for the deferral must inform the purchaser of their use tax obligations and the website address of the New Jersey Division of Taxation where they can file and report their use tax liability.