Bill Text: NJ A2362 | 2010-2011 | Regular Session | Introduced
Bill Title: Consumer Relief Act of 2010; establishes temporary sales and use tax rate reduction periods for sales of certain goods and services.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2010-03-24 - Reviewed by the Sales Tax Review Commission Recommend to not enact [A2362 Detail]
Download: New_Jersey-2010-A2362-Introduced.html
Sponsored by:
Assemblyman VINCENT J. POLISTINA
District 2 (Atlantic)
Assemblywoman CAROLINE CASAGRANDE
District 12 (Mercer and Monmouth)
SYNOPSIS
Consumer Relief Act of 2010; establishes temporary sales and use tax rate reduction periods for certain sales of certain goods and services.
CURRENT VERSION OF TEXT
As introduced.
An Act establishing certain periods of reduced sales and use tax imposition and designated as the Consumer Relief Act of 2010, supplementing P.L.1966, c.30 (C.54:32B-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. Notwithstanding the provisions of sections 3, 4, and 6 of P.L.1966, c.30 (C.54:32B-3, 54:32B-4, and 54:32B-6) to the contrary, the sales tax and the use tax which shall be paid pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) shall be imposed at the rate of 3.5% on sales made during a tax reduction period, admissions charges paid during a tax reduction period, rents for occupancies during a tax reduction period, and uses beginning during a tax reduction period; provided, however, that if the State Treasurer, in consultation with the Director of the Division of Budget and Accounting in the Department of the Treasury, shall certify to the director that federal funds are receivable, or have been received, and may be allocated to offset the amount of additional State revenue loss which may result from the imposition of the sales and use tax at a rate of less than 3.5% during a tax reduction period, the director shall reduce the rate of tax imposed pursuant to P.L.1966, c.30 during that tax reduction period to a rate of less than 3.5% but consistent with and in proportion to the federal funds that are receivable, or have been received, and may be allocated to offset State revenue loss during that tax reduction period.
b. (1) If the director shall, in accordance with subsection a. of this section, reduce the rate of tax imposed pursuant to P.L.1966, c.30 to a rate of less than 3.5% during a tax reduction period, the director shall immediately notify the State Treasurer of the rate and the terms and conditions for which tax shall be imposed during that tax reduction period and shall immediately submit a report to the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), outlining the rate and the terms and conditions for which tax shall be imposed during that tax reduction period.
(2) The report, submitted to the Legislature in accordance with paragraph (1) of subsection b. of this section, shall also provide information concerning the amount and the availability of federal funds which may be allocated to offset additional State revenue loss resulting from the imposition of the sales and use tax at a rate of less than 3.5%, and shall include data regarding the projected State revenue loss which may result from the imposition of the sales and use tax at a rate of less than 3.5% during that tax reduction period.
c. Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the director may adopt immediately upon filing with the Office of Administrative Law such regulations as the director deems necessary to implement the provisions of this section, which regulations shall be effective for a period not to exceed 180 days following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) and may thereafter be amended, adopted, or readopted by the director in accordance with P.L.1968, c.410.
d. As used in this section,
"Federal funds" includes, but shall not be limited to, monies appropriated by the United States Congress to the State of New Jersey as part of a short-term economic stimulus program dedicated or designed, in whole or in part, to increase consumer spending;
"State Treasurer" means the Treasurer of the State of New Jersey; and
"Tax reduction period" means the periods beginning: (1) on and after March 19, 2010 but before March 29, 2010; (2) on and after July 2, 2010 but before July 12, 2010; and (3) on and after October 10, 2010 but before October 20, 2010.
2. This act shall take effect immediately.
STATEMENT
This bill, designated as the Consumer Relief Act of 2010, establishes three 10-day periods of reduced sales and use tax imposition on certain sales of certain goods and services.
Under the bill, receipts from sales made, admissions charges paid, rents for occupancies, and uses beginning during the three 10-day periods are subject to the sales and use tax at a reduced rate of 3.5%. For most of the State, this equates to a tax rate reduction from 7% to 3.5%. In Urban Enterprise Zones (UEZs) and Salem County, where tax on certain goods and services is exempt to the extent of 50% of the current State rate, it equates to a reduction from 3.5% to 1.75%.
The three 10-day periods of reduced sales and use tax imposition are those beginning: (1) on and after March 19, 2010 but before March 29, 2010; (2) on and after July 2, 2010 but before July 12, 2010; and (3) on and after October 10, 2010 but before October 20, 2010. These periods are easily recognizable for consumers and marketable by retailers and small business because they correspond to (1) the beginning of spring; (2) Independence Day weekend; and (3) Columbus Day weekend.
The bill also provides an opportunity for additional reductions in the sales and use tax rate imposed during one or more of the three 10-day rate reduction periods, if federal funding is made available and may be used to offset decreases in State revenue collections. The bill stipulates that if the State Treasurer, in consultation with the Director of the Office of Management and Budget, certifies that federal funds are receivable and may be allocated to the State to offset the amount of additional State revenue loss resulting from a sales and use tax rate of less than one-half the current rate during a tax reduction period, the tax rate will be further reduced consistent with, and in proportion to, the federal funds made available to the State.
The reduction in rate to less than one-half the current sales and use tax rate will, under the bill, be carried-out by the Director of the Division of Taxation. The bill stipulates that if the director reduces the tax rate to less than half the current rate during a reduction period, the director must notify the State Treasurer and submit a report to the Legislature detailing the reduced rate and the terms and conditions for which the tax will be imposed. The report to the Legislature must provide information concerning the amount and the availability of federal funds and any data regarding projected State revenue loss resulting from a reduction of more than one-half the current rate.
The three 10-day tax reduction periods provided by the bill are intended to provide an emergency shot in the arm for New Jersey's economy - one that increases the purchasing power of consumers, creates stronger competition with surrounding states, saves businesses, and protects jobs.
The current economic decline has created an unprecedented drop in retail sales and has caused many to project that consumers will continue to spend less in the weeks and months ahead. Reducing the sales tax will make shopping in New Jersey more affordable for consumers while increasing sales for businesses. Because of the regressive nature of the sales tax, this reduction will particularly help lower income families.
If New Jersey is the only state in the region to adopt this program, it will make New Jersey retailers more competitive with those of surrounding states and thereby retain consumer spending in New Jersey that would otherwise go elsewhere. Additionally, it will draw out-of-State shoppers into Garden State stores and restaurants. The program will create a competitive advantage over Pennsylvania, which has a 6% statewide rate and an 8% rate in Philadelphia; nearly eliminate Salem County's disadvantage with Delaware, which does not impose sales tax, by reducing Salem County's rate to 1.75%; and greatly increase New Jersey's existing advantage over New York City, which has an 8.875% rate.
But if nearby states do decide to adopt a similar program, as a result of federal legislation or otherwise, New Jersey cannot afford not to match their efforts.
While much of the focus by policymakers has been on bailing out big Wall Street firms and other programs for spending taxpayer money, this bill provides relief to taxpayers in a way that will help struggling families and small businesses. Relief is direct and immediate, and involves no application process, no bureaucratic red-tape, no favoritism, and no waste. Anyone who buys an item or pays for a service subject to the sales and use tax will benefit.
This approach is not intended as a long-term fix for the State's economy; separate proposals have been made in that regard. This bill is designed to provide short-term relief for consumers and businesses living and working in New Jersey.
