Bill Text: NJ A1105 | 2024-2025 | Regular Session | Introduced
Bill Title: Exempts from sales and use tax sales of medical marijuana.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced) 2024-01-09 - Introduced, Referred to Assembly Health Committee [A1105 Detail]
Download: New_Jersey-2024-A1105-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Assemblyman JOHN DIMAIO
District 23 (Hunterdon, Somerset and Warren)
Co-Sponsored by:
Assemblyman DePhillips
SYNOPSIS
Exempts from sales and use tax sales of medical marijuana.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act exempting from the sales and use tax sales of medical marijuana and amending P.L.1980, c.105.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 13 of P.L.1980, c.105 (C.54:32B-8.1) is amended to read as follows:
13. a. Receipts from sales of the following sold for human use are exempt from the tax imposed under the "Sales and Use Tax Act":
(1) drugs sold pursuant to a doctor's prescription;
(2) over-the-counter drugs;
(3) diabetic supplies;
(4) prosthetic devices;
(5) tampons or like products;
(6) medical oxygen;
(7) human blood and its derivatives;
(8) durable medical equipment for home use;
(9) mobility enhancing equipment sold by prescription; [and]
(10) repair and replacement parts for any of the foregoing exempt devices and equipment; and
(11) medical marijuana authorized pursuant to the "New Jersey Compassionate Use Medical Marijuana Act," P.L.2009, c.307 (C.24:6I-1 et seq.).
b. As used in this section:
"Drug" means a compound, substance, or preparation, and any component of a compound, substance, or preparation, other than food and food ingredients, dietary supplements, or alcoholic beverages:
(1) recognized in the official United States Pharmacopoeia, official Homeopathic Pharmacopoeia of the United States, or official National Formulary, and supplement to any of them; or
(2) intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease; or
(3) intended to affect the structure or any function of the body.
"Over-the-counter-drug" means a drug that contains a label which identifies the product as a drug, required by 21 CFR 201.66. The label includes:
(1) a "Drug Facts" panel or
(2) a statement of the "active ingredient" or "active ingredients" with a list of those ingredients contained in the compound, substance or preparation. "Over-the-counter drug" does not include a grooming and hygiene product.
"Grooming and hygiene product" is soap or cleaning solution, shampoo, toothpaste, mouthwash, anti-perspirant, or sun tan lotion or screen, regardless of whether the item meets the definition of "over-the-counter drug."
"Prescription" means an order, formula, or recipe issued in any form of oral, written, electronic, or other means of transmission by a duly licensed practitioner authorized by the laws of this State.
"Prosthetic device" means a replacement, corrective, or supportive device including repair and replacement parts for same worn on or in the body in order to:
(1) artificially replace a missing portion of the body; or
(2) prevent or correct a physical disability; or
(3) support a weak or disabled portion of the body.
"Durable medical equipment" means equipment, including repair and replacement parts, but not including mobility enhancing equipment, that:
(1) can withstand repeated use;
(2) is primarily and customarily used to serve a medical purpose;
(3) is generally not useful to a person in the absence of illness or injury; and
(4) is not worn in or on the body.
"Mobility enhancing equipment" means equipment, including repair and replacement parts, other than durable medical equipment, that:
(1) is primarily and customarily used to provide or increase the ability to move from one place to another and which is appropriate for use either at home or in a motor vehicle; and
(2) is not generally used by persons with typical mobility; and
(3) does not include any motor vehicle or equipment on a motor vehicle normally provided by a motor vehicle manufacturer.
c. Receipts from sales of supplies purchased for use in providing medical services for compensation, but not transferred to the purchaser of the service in conjunction with the performance of the service, shall be considered taxable receipts from retail sales notwithstanding the exemption from the tax imposed under the "Sales and Use Tax Act" provided under this section.
(cf: P.L.2017, c.131, s.214)
2. This act shall take
effect immediately and shall apply to receipts from sales of medical marijuana
made on or after the first day of the first month of the first calendar quarter
beginning at least 90 days after the date of enactment.
STATEMENT
This bill exempts from the sales and use tax the sale of medical marijuana authorized pursuant to the "New Jersey Compassionate Use Medical Marijuana Act," N.J.S.A.24:6I-1 et seq. The Department of the Treasury has interpreted the "Sales and Use Tax Act" to apply to the dispensation of medical marijuana.
Medical marijuana is prescribed in New Jersey for several chronic and debilitating diseases, such as terminal cancer, multiple sclerosis, and seizure disorders, among other life altering conditions. Drugs sold pursuant to a doctor's prescription are exempt from the sales and use tax; however, medical marijuana is still subject to the sales and use tax despite being prescribed by doctors. The patients who are prescribed medical marijuana will incur the full cost since medical marijuana is federally prohibited from being insured. The bill's intent is to help patients, who are suffering from a chronic and debilitating disease, afford their prescribed medication by removing the burden of taxation. Thus, the bill eliminates the sales tax imposed on medical marijuana purchases.
The bill takes effect immediately and applies to medical marijuana sold on or after the first day of the first month of the first calendar quarter beginning at least 90 days after the date of enactment.
