Bill Text: NJ A2608 | 2012-2013 | Regular Session | Introduced
Bill Title: Provides temporary deferral of certain sales and use tax collection responsibilities of certain persons making certain investments and creating certain jobs.*
Spectrum: Partisan Bill (Democrat 6-0)
Status: (Engrossed - Dead) 2012-05-03 - Received in the Senate, Referred to Senate Budget and Appropriations Committee [A2608 Detail]
Download: New_Jersey-2012-A2608-Introduced.html
Sponsored by:
Assemblyman ALBERT COUTINHO
District 29 (Essex)
Assemblyman VINCENT PRIETO
District 32 (Bergen and Hudson)
Assemblyman TROY SINGLETON
District 7 (Burlington)
Assemblyman LOUIS D. GREENWALD
District 6 (Burlington and Camden)
SYNOPSIS
Provides temporary deferral of certain sales and use tax collection responsibilities of certain persons making certain investments and creating certain jobs and revises sales and use tax to enumerate certain persons presumed to be sellers.
CURRENT VERSION OF TEXT
As introduced.
An Act providing for the deferral of certain sales and use tax collection responsibilities of certain persons for certain periods and revising the sales and use tax to enumerate certain persons presumed to be sellers responsible for the collection of tax, amending and supplementing P.L.1966, c.30.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) As used in P.L. , c. (C. ) (pending before the Legislature as this bill):
"Business operation" means processing, procuring, packaging, shipping, or fulfilling the order of a customer and those activities or services that are ancillary to a retail sale.
"Capital investment" means a new or an additional expenditure of funds made within this State to purchase or improve real property located within this State, to purchase personal property for use in a business, and to purchase business assets subject to depreciation pursuant to the provisions of section 167 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.167).
"Comprehensive benefits" means an employee benefit program, including, but not limited to, a health care plan, a retirement account or program, and paid vacation or leave.
"Customer operations and processing facility" means one or more locations where tangible personal property, specified digital products, or services are stored, packaged, processed, and shipped for delivery to the customer of a person but where a retail sale of tangible personal property, specified digital products, or services are not made. A customer operations and processing facility that conducts the previously specified activities may utilize a person's or a related person's technology, services, or other infrastructure relating to processing, procuring, and fulfilling the order of a customer, including, but not limited to, a shared customer or subscription program, use of a similar gift card and promotional program, fraud management, inventory management software, product reviews, and cross reporting of employees of the person and of employees of the related person, and may perform the following activities within the State on behalf of a person or a related person, regardless of whether the activities are performed at the customer operations and processing facility or whether the activities are performed at a location of a related person or a location of a third party: acceptance of returns or exchanges of tangible personal property received from a customer, including the provision of customer service to the customer of a person or to the customer of a related person; performance of a repair, maintenance, or refurbishment service, including, but not limited to, the replacement of a defective or a damaged part and the repair of a broken or a damaged product that may be sold as a refurbished product by a related person or a third party without this State; manufacturing and processing of tangible personal property for use in a business operation; negotiating an agreement within this State with a person's vendors or a related person's vendors or procuring tangible personal property, a specified digital product, or a service that is subject to the tax imposed by the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) on behalf of a person or on behalf of a related person for business operations but not for retail sale from the customer operations and processing facility within this State; sending a promotional or marketing message or other form of communication by means of electronic mail to the customer of a person or to the customer of a related person from a server within this State or from a server without this State; provision of a procurement service for a business operation; any other activity that facilitates the transfer or the delivery of a specified digital product or service, except an activity relating to a retail sale; or any other activity or integration relating to a business operation between the customer operations and processing facility and a person or a related person.
"Full-time job" means a job that is provided to an individual who is a resident of this State on the date the individual is hired and that did not exist within the State prior to January 1, 2012, which job requires a minimum of 35 hours of the individual's time per week within this State for each full year of employment and which job requires comprehensive benefits be provided to the individual by the individual's employer.
"Individual who is a resident of this State" means an individual who is legally domiciled within the State of New Jersey.
"Related person" means "related person" as that term is defined by section 2 of P.L.1993, c.170 (C.54:10A-5.5).
"Transportation management association" means a nonprofit corporation approved by the Department of Transportation as coordinating transportation services, including, but not limited to, public transportation, van pools, car pools, bicycling and pedestrian modes, as well as strategies such as flex time, staggered work hours, and compressed work weeks, for corporations, employees, developers, individuals, and other groups.
2. (New section) a. Notwithstanding any other provision of law, a person who owns or leases or rents or otherwise utilizes a customer operations and processing facility of its own within this State or that of a related person within this State or that of a third party within this State, including a venue for making purchases of tangible personal property or a venue for transferring specified digital products and services for resale, that are shipped or transferred directly to a purchaser, shall be deemed not to be a seller for purposes of the tax imposed by the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), if the Executive Director of the Economic Development Authority determines that the person: meets or will meet each of the initial requirements provided by subsection b. of this section; does not engage in an activity within this State other than an activity specified by the definition of a "customer operations and processing facility" as that term is defined by section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill); and has entered into an agreement with the director in accordance with section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill) and maintains compliance with the terms and conditions of that agreement, including the terms and conditions specified by subsections b. through h. of section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).
b. The initial requirements to be deemed not a seller for the purposes of the tax imposed by the "Sales and Use Tax Act" are that the person, directly or in combination with a related person or in combination with a third party: 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.
3. (New section) a. Notwithstanding any other provision of law, the Executive Director of the Economic Development Authority shall provide notice to the affected person and to the Director of the Division of Taxation of the executive director's determination that a person meets or will meet each of the initial requirements provided by subsection b. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) and the person shall enter into an agreement with the Director of the Division of Taxation pursuant to subsections b. through h. of this section.
b. (1) The person shall file a certificate of registration with the director, in accordance with section 15 of P.L.1966, c. 30 (C.54:32B-15), on or before the earlier of: September 1, 2013; the date the person makes and files an application to receive financial assistance authorized by, or to apply for a credit against a taxpayer's liability for tax under, the "Business Retention and Relocation Assistance Act," P.L.1996, c.25 (C.34:1B-112 et seq.), the "Business Employment Incentive Program Act," P.L.1996, c.26 (C.34:1B-124 et seq.), the "Urban Transit Hub Tax Credit Act," P.L.2007, c.346 (C.34:1B-207 et seq.), the Economic Redevelopment and Growth Grant program established in accordance with section 4 or section 5 of P.L.2009, c.90 (C.52:27D-489d or C.52:27D-489e), or the "Grow New Jersey Assistance Act," P.L.2011, c.149 (C.34:1B-242 et seq.); the date the person ceases to maintain a customer operations and processing facility placed into service within this State to meet the requirements provided by subsection b. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill); the date the person maintains fewer than 1,275 of the full-time jobs created within this State to meet the requirements provided by subsection b. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill); the termination date of any law, regulation, agreement, or other binding means that provides for the temporary deferral of tax collection responsibilities in a form and a manner that is comparable to the deferral of tax collection responsibilities provided by P.L. , c. (C. ) (pending before the Legislature as this bill) and that is entered into by the person with a state other than the State of New Jersey on or after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill); the effective date of a law enacted by the United States Congress that permits a state to require that its sales tax or its use tax be collected, reported, and remitted to the State even if the person required to collect the tax under that law does not have a physical presence within that state that would otherwise give the state jurisdiction to impose tax collection responsibilities under the Constitution and statutes of the United States; the date the person engages in an activity within this State that is sufficient to give this State jurisdiction to impose tax collection responsibilities on that person under the Constitution and statutes of the United States and that is not specified by the definition of "customer operations and processing facility," as that term is defined by section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill); or the date the person violates one or more of the terms and conditions of the agreement entered into with the director in accordance with this section.
(2) The director shall issue, within 5 days of the date a certificate of registration is received, a certificate of authority, without charge in accordance with paragraph (1) of this subsection empowering the person to collect the tax imposed by the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) and a duplicate thereof for each additional place of business of that person.
(3) The person who is issued a certificate of authority in accordance with paragraph (2) of this section shall collect the tax imposed by P.L.1966, c.30 (C.54:32B-1 et seq.) on any sale to persons within this State of tangible personal property, specified digital products, and services that is subject to the tax imposed by P.L.1966, c.30 (C.54:32B-1 et seq.) and that is made on or after the date the certificate of authority is received by the person.
(4) The person shall pay the tax imposed by P.L.1966, c.30 (C.54:32B-1 et seq.) on any sale to persons within this State of tangible personal property, specified digital products, and services that is subject to the tax imposed by P.L.1966, c.30 (C.54:32B-1 et seq.) and that is made on or after the after the earliest of the dates specified by paragraph (1) of this subsection if the person fails to file a certificate of registration required to be made by the person with the director in accordance with paragraph (1) of this subsection.
c. The person shall comply with the terms and conditions of any agreement entered into in accordance with subsection a. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill), and shall comply with the requirements of subsection b. of section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).
d. The person shall provide notice to its customers and shall include in the notice information required to be provided to customers in accordance with section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill).
e. The person shall establish a transportation plan or an alternative transportation plan with the Executive Director of the New Jersey Transit Corporation and any applicable transportation management association in accordance with section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill).
f. The person shall make and submit a monthly progress report in accordance with section 7 of P.L. , c. (C. ) (pending before the Legislature as this bill).
g. The person shall pay any penalty required to be paid to the director in accordance with sections 8 through 13 of P.L. , c. (C. ) (pending before the Legislature as this bill).
h. The person shall submit a notarized copy of the agreement entered into with the director in accordance with this section to the Executive Director of the Economic Development Authority and the Legislature, in accordance with section 2 of P.L.1991, c.164 (C.52:14-19.1), not later than 10 days after the date the agreement is first entered into, and shall submit a notarized copy of an amendment or a modification to the agreement not later than 10 days after the date the amendment or modification to the agreement is first made.
4. (New section) a. Notwithstanding any other provision of law, the construction, reconstruction, demolition, or renovation related to a customer operations and processing facility that is placed into service within this State to meet the requirements provided by subsection b. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall include, as part of a contract or agreement entered into for the construction, reconstruction, demolition, or renovation, an agreement that: establishes the terms and conditions of employment for each individual employed in the construction, reconstruction, demolition, or renovation related to a customer operations and processing facility prior to the date any individual is hired; meets or exceeds each of the requirements for a public works project enumerated by section 5 of P.L.2002, c.44 (C.52:38-5); and is binding and enforceable on all parties directly involved in the construction, reconstruction, demolition, or renovation related to the customer operations and processing facility.
b. Each individual employed in the construction, reconstruction, demolition, or renovation related to a customer operations and processing facility that is placed into service within this State to meet the requirements provided by subsection b. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) by a person who has entered into an agreement pursuant to subsection a. of this section shall be subject to the requirements provided by section 1 of P.L.1979, c.303 (C.34:1B-5.1); provided however, that the exception for work performed on a facility owned by a landlord of the entity receiving authority financial assistance in accordance with that section shall not apply.
5. (New section) a. Notwithstanding any other provision of law, a person who is deemed not to be a seller in accordance with subsection a. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall provide prominently on any sales slip, invoice, receipt, or other statement or memorandum given to its customers in connection with its sales to persons within this State of tangible personal property, specified digital products, and services, made on or after the date the person is deemed not to be a seller in accordance with subsection a. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) but before the date the person receives a certificate of authority from the director and is required to collect the tax imposed by the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), in accordance with section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill), notice that the tax imposed by P.L.1966, c.30 (C.54:32B-1 et seq.) has not been charged or collected by the person selling the tangible personal property, specified digital products, and services to the customer, and that the amount of any sales tax or any use tax due in connection with the customer's purchase of tangible personal property, specified digital products, and services may be required to be reported and remitted to the State by the customer making the purchase.
b. The notice required to be provided in accordance with subsection a. of this section shall include, if applicable, the Internet link or Internet address that will direct a customer to the Internet website maintained and operated, or caused to be maintained and operated, by the director to assist a taxpayer in determining a liability for any sales tax or any use tax due in connection with the purchase of tangible personal property, specified digital products, and services from a retailer that is not required or authorized to collect the tax on behalf of the State and to assist a taxpayer in reporting and remitting the tax determined to be due.
6. (New section) a. Notwithstanding any other provision of law, if a person who is deemed not to be a seller in accordance with subsection a. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) locates a customer operations and processing facility placed into service within this State to meet the requirements provided by subsection b. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) at a location that is within a one quarter mile radius of a public transportation facility, the person shall work with the Executive Director of the New Jersey Transit Corporation and with any applicable transportation management association to establish a transportation plan that will encourage individuals employed at the customer operations and processing facility to utilize public transportation to travel between the individual's place of residence and the customer operations and processing facility or termini within the proximity of the customer operations and processing facility.
b. If a person who is deemed not to be a seller in accordance with subsection a. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) locates a customer operations and processing facility placed into service within this State to meet the requirements provided by subsection b. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) at a location that is not within a one quarter mile radius of a public transportation facility and that facility is not otherwise accessible by public transportation, the person shall work with the Executive Director of the New Jersey Transit Corporation and with any applicable transportation management association to establish an alternative transportation plan that will provide viable commuting options to an individual who is employed at the customer operations and processing facility and who is dependent on public transportation to commute between the individual's place of residence and the customer operations and processing facility or termini within the proximity of the customer operations and processing facility.
c. A person who is deemed not to be a seller in accordance with subsection a. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) and who establishes a transportation plan or an alternative transportation plan in accordance with subsection a. or subsection b. of this section shall submit a notarized copy of the transportation plan or the alternative transportation plan to the director, the Executive Director of the Economic Development Authority, and the Legislature, in accordance with section 2 of P.L.1991, c.164 (C.52:14-19.1), not later than 10 days after the date the transportation plan or the alternative transportation plan is first established, and shall submit a notarized copy of any amendments or any modifications made to the transportation plan or the alternative transportation plan to the director, the executive director, and the Legislature, in accordance with section 2 of P.L.1991, c.164 (C.52:14-19.1), not later than 10 days after the date an amendment or a modification to the transportation plan or the alternative transportation plan is first made.
7. (New section) a. Notwithstanding any other provision of law, a person who is deemed not to be a seller in accordance with subsection a. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall make a monthly progress report furnishing, at a minimum, the following: the location of each customer operations and processing facility placed into service or maintained in service within this State during the month; the dollar value of the capital investment made, or caused to be made, within this State during the month; the number of full-time jobs created and maintained each day during the month; and the dollar value of gross receipts derived from the person's sale to purchasers within this State of tangible personal property, specified digital products, and services made during the month.
b. The monthly progress report required to be made in accordance with subsection a. of this section shall be submitted to the director, the Executive Director of the Economic Development Authority, and the Legislature, in accordance with section 2 of P.L.1991, c.164 (C.52:14-19.1), on or before the twentieth day following the end of the preceding month, beginning with the first month following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill).
c. The person's chief executive officer, or equivalent officer, shall provide certification, in a form and manner as shall be prescribed by the director, that the chief executive officer, or equivalent officer, has reviewed the information contained in the monthly progress report required to be made in accordance with subsection a. of this section and that the representations contained in the monthly progress report are accurate.
8. (New section) a. Notwithstanding any other provision of law, if a person who is deemed not to be a seller in accordance with subsection a. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) fails to places one or more customer operations and processing facilities in service within this State to meet the requirements provided by subsection b. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), on or after January 1, 2012 but before September 1, 2013, the person shall pay a penalty to the director.
b. The amount of penalty required to be paid in accordance with subsection a. of this section shall be equal to seven percent of the gross receipts derived from the person's sale to purchasers within this State of tangible personal property, specified digital products, and services made on or after January 1, 2012 but before September 1, 2013.
9. (New section) a. Notwithstanding any other provision of law, if a person who is deemed not to be a seller in accordance with subsection a. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) ceases to maintain a customer operations and processing facility placed into service within this State to meet the requirements provided by subsection b. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), on or after the date the person first meets the requirement to place one or more customer operations and processing facilities in service within this State but before September 1, 2013, the person shall pay a penalty to the director.
b. The amount of penalty required to be paid in accordance with subsection a. of this section shall be equal to seven percent of the gross receipts derived from the person's sale to purchasers within this State of tangible personal property, specified digital products, and services made on or after the date the person first meets the requirement to place one or more customer operations and processing facilities in service within this State in accordance with subsection b. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) but before September 1, 2013.
10. (New section) a. Notwithstanding any other provision of law, if a person who is deemed not to be a seller in accordance with subsection a. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) fails to make, or fails to cause to be made, a capital investment of not less than $65,000,000 within this State to meet the requirements provided by subsection b. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), on or after January 1, 2012 but before December 1, 2013, the person shall be required to pay a penalty to the director.
b. The amount of penalty required to be paid in accordance with subsection a. of this section shall be equal to seven percent of the gross receipts derived from the person's sale to purchasers within this State of tangible personal property, specified digital products, and services made on or after January 1, 2012 but before December 1, 2013.
11. (New section) a. Notwithstanding any other provision of law, if a person who is deemed not to be a seller in accordance with subsection a. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) fails to create not fewer than 1,500 full-time jobs within this State to meet the requirements provided by subsection b. of section 2 of P.L. , c. (C. ), on or after January 1, 2012 but before December 1, 2013, the person shall pay a penalty to the director.
b. The amount of penalty required to be paid in accordance with subsection a. of this section shall be equal to seven percent of the gross receipts derived from the person's sale to purchasers within this State of tangible personal property, specified digital products, and services made on or after January 1, 2012 but before December 1, 2013.
12. (New section) a. Notwithstanding any other provision of law, if a person who is deemed not to be a seller in accordance with subsection a. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) maintains fewer than 1,500 of the full-time jobs created within this State to meet the requirements provided by subsection b. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), on or after the date the person first meets the full-time job creation requirement but before the first day of the fifty-ninth month beginning after the month in which the person first meets the full-time job creation requirement, the person shall pay a penalty to the director.
b. The amount of penalty required to be paid in accordance with subsection a. of this section shall be equal to seven percent of the gross receipts derived from the person's sale to purchasers within this State of tangible personal property, specified digital products, and services made on or after the date the person first meets the full-time job creation requirement provided by subsection b. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) but before the first day of the fifty-ninth month beginning after the month in which the person first meets the full-time job creation requirement.
c. The penalty required to be paid in accordance with subsection a. of this section shall not apply if the reduction in the number of full-time jobs created within this State to meet the requirements provided by subsection b. of Section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) is limited to a period of not more than 60 days.
13. (New section) a. Notwithstanding any other provision of law, if a person who is deemed not to be a seller in accordance with subsection a. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) maintains fewer than 1,275 of the full-time jobs created within this State to meet the requirements provided by subsection b. of Section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), on or after the date the person first meets the full-time job creation requirement but before the first day of the fifty-ninth month beginning after the month in which the person first meets the full-time job creation requirement, the person shall pay a penalty to the director.
b. The amount of penalty required to be paid in accordance with subsection a. of this section shall be equal to seven percent of the gross receipts derived from the person's sale to purchasers within this State of tangible personal property, specified digital products, and services made on or after the date the person first meets the full-time job creation requirement provided by subsection b. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) but before the first day of the fifty-ninth month beginning after the month in which the person first meets the full-time job creation requirement.
14. (New section) Notwithstanding any other provision of law, the director shall issue a tax assessment for the collection of any penalty required to be paid to the director in accordance with sections 8 through 13 of P.L. , c. (C. ) (pending before the Legislature as this bill). The amount of penalty required to be paid to the director shall be a State tax subject to the State Uniform Tax Procedure Law, R.S.54:48-1 et seq., and the amount of any penalty captured by the director shall be deposited into the General Fund.
15. (New section) Notwithstanding any other provision of law, the temporary deferral of tax collection responsibilities provided to a person who is deemed not to be a seller in accordance with subsection a. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be null and void and shall not apply on or after the earliest of the dates specified by paragraph (1) of subsection b. of section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).
16. Notwithstanding any other provision of law, the temporary deferral of tax collection responsibilities provided to a person who is deemed not to be a seller in accordance with subsection a. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall not apply to another person who has the relationship of a related person or who has the relationship of a third party to the person who is deemed not to be a seller in accordance with subsection a. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), and who is required or authorized by the director, in accordance with section 15 of P.L.1966, c.30 (C.54:32B-15), to collect the tax imposed by the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) as of February 21, 2012.
17. (New section) Notwithstanding any provision of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), the director, in consultation with the Executive Director of the Economic Development Authority, may adopt immediately upon filing with the Office of Administrative Law such regulations as the director and the executive director deem necessary to effectuate the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill), which regulations shall be effective for a period of not more than 360 days following the effective date 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 the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).
18. Section 2 of P.L.1966, c.30 (C.54:32B-2) is amended to read as follows:
2. Unless the context in which they occur requires otherwise, the following terms when used in this act shall mean:
(a) "Person" includes an individual, trust, partnership, limited partnership, limited liability company, society, association, joint stock company, corporation, public corporation or public authority, estate, receiver, trustee, assignee, referee, fiduciary and any other legal entity.
(b) "Purchase at retail" means a purchase by any person at a retail sale.
(c) "Purchaser" means a person to whom a sale of personal property is made or to whom a service is furnished.
(d) "Receipt" means the amount of the sales price of any tangible personal property, specified digital product or service taxable under this act.
(e) "Retail sale" means any sale, lease, or rental for any purpose, other than for resale, sublease, or subrent.
(1) For the purposes of this act a sale is for "resale, sublease, or subrent" if it is a sale (A) for resale either as such or as converted into or as a component part of a product produced for sale by the purchaser, including the conversion of natural gas into another intermediate or end product, other than electricity or thermal energy, produced for sale by the purchaser, (B) for use by that person in performing the services subject to tax under subsection (b) of section 3 where the property so sold becomes a physical component part of the property upon which the services are performed or where the property so sold is later actually transferred to the purchaser of the service in conjunction with the performance of the service subject to tax, (C) of telecommunications service to a telecommunications service provider for use as a component part of telecommunications service provided to an ultimate customer, or (D) to a person who receives by contract a product transferred electronically for further commercial broadcast, rebroadcast, transmission, retransmission, licensing, relicensing, distribution, redistribution or exhibition of the product, in whole or in part, to another person, other than rights to redistribute based on statutory or common law doctrine such as fair use.
(2) For the purposes of this act, the term "retail sale" includes: sales of tangible personal property to all contractors, subcontractors or repairmen of materials and supplies for use by them in erecting structures for others, or building on, or otherwise improving, altering, or repairing real property of others.
(3) (Deleted by amendment, P.L.2005, c.126).
(4) The term "retail sale" does not include:
(A) Professional, insurance, or personal service transactions which involve the transfer of tangible personal property as an inconsequential element, for which no separate charges are made.
(B) The transfer of tangible personal property to a corporation, solely in consideration for the issuance of its stock, pursuant to a merger or consolidation effected under the laws of New Jersey or any other jurisdiction.
(C) The distribution of property by a corporation to its stockholders as a liquidating dividend.
(D) The distribution of property by a partnership to its partners in whole or partial liquidation.
(E) The transfer of property to a corporation upon its organization in consideration for the issuance of its stock.
(F) The contribution of property to a partnership in consideration for a partnership interest therein.
(G) The sale of tangible personal property where the purpose of the vendee is to hold the thing transferred as security for the performance of an obligation of the seller.
(f) "Sale, selling or purchase" means any transfer of title or possession or both, exchange or barter, rental, lease or license to use or consume, conditional or otherwise, in any manner or by any means whatsoever for a consideration, or any agreement therefor, including the rendering of any service, taxable under this act, for a consideration or any agreement therefor.
(g) "Tangible personal property" means personal property that can be seen, weighed, measured, felt, or touched, or that is in any other manner perceptible to the senses. "Tangible personal property" includes electricity, water, gas, steam, and prewritten computer software including prewritten computer software delivered electronically.
(h) "Use" means the exercise of any right or power over tangible personal property, specified digital products, services to property or products, or services by the purchaser thereof and includes, but is not limited to, the receiving, storage or any keeping or retention for any length of time, withdrawal from storage, any distribution, any installation, any affixation to real or personal property, or any consumption of such property or products. Use also includes the exercise of any right or power over intrastate or interstate telecommunications and prepaid calling services. Use also includes the exercise of any right or power over utility service. Use also includes the derivation of a direct or indirect benefit from a service.
(i) "Seller" means a person making sales, leases or rentals of personal property or services.
(1) The term "seller" includes:
(A) A person making sales, leases or rentals of tangible personal property, specified digital products or services, the receipts from which are taxed by this act;
(B) A person maintaining a place of business in the State or having an agent maintaining a place of business in the State and making sales, whether at such place of business or elsewhere, to persons within the State of tangible personal property, specified digital products or services, the use of which is taxed by this act;
(C) A person who solicits business either by employees, independent contractors, agents or other representatives or by distribution of catalogs or other advertising matter and by reason thereof makes sales to persons within the State of tangible personal property, specified digital products or services, the use of which is taxed by this act;
(D) Any other person making sales to persons within the State of tangible personal property, specified digital products or services, the use of which is taxed by this act, who may be authorized by the director to collect the tax imposed by this act;
(E) The State of New Jersey, any of its agencies, instrumentalities, public authorities, public corporations (including a public corporation created pursuant to agreement or compact with another state) or political subdivisions when such entity sells services or property of a kind ordinarily sold by private persons;
(F) (Deleted by amendment, P.L.2005, c.126);
(G) A person who sells, stores, delivers or transports energy to users or customers in this State whether by mains, lines or pipes located within this State or by any other means of delivery;
(H) A person engaged in collecting charges in the nature of initiation fees, membership fees or dues for access to or use of the property or facilities of a health and fitness, athletic, sporting or shopping club or organization; [and]
(I) A person engaged in the business of parking, storing or garaging motor vehicles;
(J) A person making sales to persons within the State of tangible personal property, specified digital products or services, the sale or the use of which is subject to the tax imposed by the "Sales and Use Tax Act," P.L.1966, c30 (C.54:32B-1 et seq.), who may be authorized by the director pursuant to subsection b. of section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill) to collect the tax imposed by P.L.1966, c.30 (C.54:32B-1 et seq.);
(K) A person shall be presumed to be a seller if another person with sufficient physical presence in this State to give this State jurisdiction to impose tax collection responsibilities on that other person, other a common carrier acting in its capacity as such:
(1) sells a similar line of products as the person and does so under the same or a similar business name;
(2) maintains an office, distribution facility, warehouse or storage place, or similar place of business in the State to facilitate the delivery of property or services sold by the person to the person's customers;
(3) uses trademarks, service marks, or trade names in the State that are the same or substantially similar to those used by the person;
(4) delivers, installs, assembles, or performs maintenance services for the person's customers within the State;
(5) facilitates the person's delivery of property to customers in the State by allowing the person's customers to pick up property sold by the seller at an office distribution facilities, warehouse, storage place, or similar place of business maintained in the state; or
(6) conducts any other activities in the State that are significantly associated with the person's ability to establish and maintain a market in the State for the person's sales; and
(L) The presumption of subparagraph (K) of this subsection may be rebutted by demonstrating that the activities conducted in this State are not significantly associated with the person's ability to establish or maintain a market in this State for the person's sales.
(2) In addition, when in the opinion of the director it is necessary for the efficient administration of this act to treat any salesman, representative, peddler or canvasser as the agent of the seller, distributor, supervisor or employer under whom the agent operates or from whom the agent obtains tangible personal property or a specified digital product sold by the agent or for whom the agent solicits business, the director may, in the director's discretion, treat such agent as the seller jointly responsible with the agent's principal, distributor, supervisor or employer for the collection and payment over of the tax. A person is an agent of a seller in all cases, but not limited to such cases, that: (A) the person and the seller have the relationship of a "related person" described pursuant to section 2 of P.L.1993, c.170 (C.54:10A-5.5); and (B) the seller and the person use an identical or substantially similar name, tradename, trademark, or goodwill, to develop, promote, or maintain sales, or the person and the seller pay for each other's services in whole or in part contingent upon the volume or value of sales, or the person and the seller share a common business plan or substantially coordinate their business plans, or the person provides services to, or that inure to the benefit of, the seller related to developing, promoting, or maintaining the seller's market.
(j) "Hotel" means a building or portion of it which is regularly used and kept open as such for the lodging of guests. The term "hotel" includes an apartment hotel, a motel, boarding house or club, whether or not meals are served.
(k) "Occupancy" means the use or possession or the right to the use or possession, of any room in a hotel.
(l) "Occupant" means a person who, for a consideration, uses, possesses, or has the right to use or possess, any room in a hotel under any lease, concession, permit, right of access, license to use or other agreement, or otherwise.
(m) "Permanent resident" means any occupant of any room or rooms in a hotel for at least 90 consecutive days shall be considered a permanent resident with regard to the period of such occupancy.
(n) "Room" means any room or rooms of any kind in any part or portion of a hotel, which is available for or let out for any purpose other than a place of assembly.
(o) "Admission charge" means the amount paid for admission, including any service charge and any charge for entertainment or amusement or for the use of facilities therefor.
(p) "Amusement charge" means any admission charge, dues or charge of a roof garden, cabaret or other similar place.
(q) "Charge of a roof garden, cabaret or other similar place" means any charge made for admission, refreshment, service, or merchandise at a roof garden, cabaret or other similar place.
(r) "Dramatic or musical arts admission charge" means any admission charge paid for admission to a theater, opera house, concert hall or other hall or place of assembly for a live, dramatic, choreographic or musical performance.
(s) "Lessor" means any person who is the owner, licensee, or lessee of any premises, tangible personal property or a specified digital product which the person leases, subleases, or grants a license to use to other persons.
(t) "Place of amusement" means any place where any facilities for entertainment, amusement, or sports are provided.
(u) "Casual sale" means an isolated or occasional sale of an item of tangible personal property or a specified digital product by a person who is not regularly engaged in the business of making retail sales of such property or product where the item of tangible personal property or the specified digital product was obtained by the person making the sale, through purchase or otherwise, for the person's own use.
(v) "Motor vehicle" includes all vehicles propelled otherwise than by muscular power (excepting such vehicles as run only upon rails or tracks), trailers, semitrailers, house trailers, or any other type of vehicle drawn by a motor-driven vehicle, and motorcycles, designed for operation on the public highways.
(w) "Persons required to collect tax" or "persons required to collect any tax imposed by this act" includes: every seller of tangible personal property, specified digital products or services; every recipient of amusement charges; every operator of a hotel; every seller of a telecommunications service; every recipient of initiation fees, membership fees or dues for access to or use of the property or facilities of a health and fitness, athletic, sporting or shopping club or organization; and every recipient of charges for parking, storing or garaging a motor vehicle. Said terms shall also include any officer or employee of a corporation or of a dissolved corporation who as such officer or employee is under a duty to act for such corporation in complying with any requirement of this act and any member of a partnership.
(x) "Customer" includes: every purchaser of tangible personal property, specified digital products or services; every patron paying or liable for the payment of any amusement charge; every occupant of a room or rooms in a hotel; every person paying charges in the nature of initiation fees, membership fees or dues for access to or use of the property or facilities of a health and fitness, athletic, sporting or shopping club or organization; and every purchaser of parking, storage or garaging a motor vehicle.
(y) "Property and services the use of which is subject to tax" includes: (1) all property sold to a person within the State, whether or not the sale is made within the State, the use of which property is subject to tax under section 6 or will become subject to tax when such property is received by or comes into the possession or control of such person within the State; (2) all services rendered to a person within the State, whether or not such services are performed within the State, upon tangible personal property or a specified digital product the use of which is subject to tax under section 6 or will become subject to tax when such property or product is distributed within the State or is received by or comes into possession or control of such person within the State; (3) intrastate, interstate, or international telecommunications sourced to this State pursuant to section 29 of P.L.2005, c.126 (C.54:32B-3.4); (4) (Deleted by amendment, P.L.1995, c.184); (5) energy sold, exchanged or delivered in this State for use in this State; (6) utility service sold, exchanged or delivered in this State for use in this State; (7) mail processing services in connection with printed advertising material distributed in this State; (8) (Deleted by amendment, P.L.2005, c.126); and (9) services the benefit of which are received in this State.
(z) "Director" means the Director of the Division of Taxation in the State Department of the Treasury, or any officer, employee or agency of the Division of Taxation in the Department of the Treasury duly authorized by the director (directly, or indirectly by one or more redelegations of authority) to perform the functions mentioned or described in this act.
(aa) "Lease or rental" means any transfer of possession or control of tangible personal property for a fixed or indeterminate term for consideration. A "lease or rental" may include future options to purchase or extend.
(1) "Lease or rental" does not include:
(A) A transfer of possession or control of property under a security agreement or deferred payment plan that requires the transfer of title upon completion of the required payments;
(B) A transfer of possession or control of property under an agreement that requires the transfer of title upon completion of required payments and payment of an option price does not exceed the greater of $100 or one percent of the total required payments; or
(C) Providing tangible personal property or a specified digital product along with an operator for a fixed or indeterminate period of time. A condition of this exclusion is that the operator is necessary for the equipment to perform as designed. For the purpose of this subparagraph, an operator must do more than maintain, inspect, or set-up the tangible personal property or specified digital product.
(2) "Lease or rental" does include agreements covering motor vehicles and trailers where the amount of consideration may be increased or decreased by reference to the amount realized upon sale or disposition of the property as defined in 26 U.S.C. s.7701(h)(1).
(3) The definition of "lease or rental" provided in this subsection shall be used for the purposes of this act regardless of whether a transaction is characterized as a lease or rental under generally accepted accounting principles, the federal Internal Revenue Code or other provisions of federal, state or local law.
(bb) (Deleted by amendment, P.L.2005, c.126).
(cc) "Telecommunications service" means the electronic transmission, conveyance, or routing of voice, data, audio, video, or any other information or signals to a point, or between or among points.
"Telecommunications service" shall include such transmission, conveyance, or routing in which computer processing applications are used to act on the form, code, or protocol of the content for purposes of transmission, conveyance, or routing without regard to whether such service is referred to as voice over Internet protocol services or is classified by the Federal Communications Commission as enhanced or value added. "Telecommunications service" shall not include:
(1) (Deleted by amendment, P.L.2008, c.123);
(2) (Deleted by amendment, P.L.2008, c.123);
(3) (Deleted by amendment, P.L.2008, c.123);
(4) (Deleted by amendment, P.L.2008, c.123);
(5) (Deleted by amendment, P.L.2008, c.123);
(6) (Deleted by amendment, P.L.2008, c.123);
(7) data processing and information services that allow data to be generated, acquired, stored, processed, or retrieved and delivered by an electronic transmission to a purchaser where such purchaser's primary purpose for the underlying transaction is the processed data or information;
(8) installation or maintenance of wiring or equipment on a customer's premises;
(9) tangible personal property;
(10) advertising, including but not limited to directory advertising;
(11) billing and collection services provided to third parties;
(12) internet access service;
(13) radio and television audio and video programming services, regardless of the medium, including the furnishing of transmission, conveyance, and routing of such services by the programming service provider. Radio and television audio and video programming services shall include but not be limited to cable service as defined in section 47 U.S.C. s.522(6) and audio and video programming services delivered by commercial mobile radio service providers, as defined in section 47 C.F.R. 20.3;
(14) ancillary services; or
(15) digital products delivered electronically, including but not limited to software, music, video, reading materials, or ringtones.
For the purposes of this subsection:
"ancillary service" means a service that is associated with or incidental to the provision of telecommunications services, including but not limited to detailed telecommunications billing, directory assistance, vertical service, and voice mail service;
"conference bridging service" means an ancillary service that links two or more participants of an audio or video conference call and may include the provision of a telephone number. Conference bridging service does not include the telecommunications services used to reach the conference bridge;
"detailed telecommunications billing service" means an ancillary service of separately stating information pertaining to individual calls on a customer's billing statement;
"directory assistance" means an ancillary service of providing telephone number information or address information or both;
"vertical service" means an ancillary service that is offered in connection with one or more telecommunications services, which offers advanced calling features that allow customers to identify callers and to manage multiple calls and call connections, including conference bridging services; and
"voice mail service" means an ancillary service that enables the customer to store, send, or receive recorded messages. Voice mail service does not include any vertical service that a customer may be required to have to utilize the voice mail service.
(dd) (1) "Intrastate telecommunications" means a telecommunications service that originates in one United States state or a United States territory or possession or federal district, and terminates in the same United States state or United States territory or possession or federal district.
(2) "Interstate telecommunications" means a telecommunications service that originates in one United States state or a United States territory or possession or federal district, and terminates in a different United States state or United States territory or possession or federal district.
(3) "International telecommunications" means a telecommunications service that originates or terminates in the United States and terminates or originates outside the United States, respectively. "United States" includes the District of Columbia or a United States territory or possession.
(ee) (Deleted by amendment, P.L.2008, c.123)
(ff) "Natural gas" means any gaseous fuel distributed through a pipeline system.
(gg) "Energy" means natural gas or electricity.
(hh) "Utility service" means the transportation or transmission of natural gas or electricity by means of mains, wires, lines or pipes, to users or customers.
(ii) "Self-generation unit" means a facility located on the user's property, or on property purchased or leased from the user by the person owning the self-generation unit and such property is contiguous to the user's property, which generates electricity to be used only by that user on the user's property and is not transported to the user over wires that cross a property line or public thoroughfare unless the property line or public thoroughfare merely bifurcates the user's or self-generation unit owner's otherwise contiguous property.
(jj) "Co-generation facility" means a facility the primary purpose of which is the sequential production of electricity and steam or other forms of useful energy which are used for industrial or commercial heating or cooling purposes and which is designated by the Federal Energy Regulatory Commission, or its successor, as a "qualifying facility" pursuant to the provisions of the "Public Utility Regulatory Policies Act of 1978," Pub.L.95-617.
(kk) "Non-utility" means a company engaged in the sale, exchange or transfer of natural gas that was not subject to the provisions of P.L.1940, c.5 (C.54:30A-49 et seq.) prior to December 31, 1997.
(ll) "Pre-paid calling service" means the right to access exclusively telecommunications services, which shall be paid for in advance and which enables the origination of calls using an access number or authorization code, whether manually or electronically dialed, and that is sold in predetermined units or dollars of which the number declines with use in a known amount.
(mm) "Mobile telecommunications service" means the same as that term is defined in the federal "Mobile Telecommunications Sourcing Act,'' 4 U.S.C. s.124 (Pub.L.106-252).
(nn) (Deleted by amendment, P.L.2008, c.123)
(oo) (1) "Sales price" is the measure subject to sales tax and means the total amount of consideration, including cash, credit, property, and services, for which personal property or services are sold, leased, or rented, valued in money, whether received in money or otherwise, without any deduction for the following:
(A) The seller's cost of the property sold;
(B) The cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller;
(C) Charges by the seller for any services necessary to complete the sale;
(D) Delivery charges;
(E) (Deleted by amendment, P.L.2011, c.49); and
(F) (Deleted by amendment, P.L.2008, c.123).
(2) "Sales price" does not include:
(A) Discounts, including cash, term, or coupons that are not reimbursed by a third party, that are allowed by a seller and taken by a purchaser on a sale;
(B) Interest, financing, and carrying charges from credit extended on the sale of personal property or services, if the amount is separately stated on the invoice, bill of sale, or similar document given to the purchaser;
(C) Any taxes legally imposed directly on the consumer that are separately stated on the invoice, bill of sale, or similar document given to the purchaser;
(D) The amount of sales price for which food stamps have been properly tendered in full or part payment pursuant to the federal Food Stamp Act of 1977, Pub.L.95-113 (7 U.S.C. s.2011 et seq.); or
(E) Credit for any trade-in of property of the same kind accepted in part payment and intended for resale if the amount is separately stated on the invoice, bill of sale, or similar document given to the purchaser.
(3) "Sales price" includes consideration received by the seller from third parties if:
(A) The seller actually receives consideration from a party other than the purchaser and the consideration is directly related to a price reduction or discount on the sale;
(B) The seller has an obligation to pass the price reduction or discount through to the purchaser;
(C) The amount of the consideration attributable to the sale is fixed and determinable by the seller at the time of the sale of the item to the purchaser; and
(D) One of the following criteria is met:
(i) the purchaser presents a coupon, certificate, or other documentation to the seller to claim a price reduction or discount where the coupon, certificate, or documentation is authorized, distributed, or granted by a third party with the understanding that the third party will reimburse any seller to whom the coupon, certificate, or documentation is presented;
(ii) the purchaser identifies himself to the seller as a member of a group or organization entitled to a price reduction or discount; provided however, that a preferred customer card that is available to any patron does not constitute membership in such a group; or
(iii) the price reduction or discount is identified as a third party price reduction or discount on the invoice received by the purchaser or on a coupon, certificate, or other documentation presented by the purchaser.
(4) In the case of a bundled transaction that includes a telecommunications service, an ancillary service, internet access, or an audio or video programming service, if the price is attributable to products that are taxable and products that are nontaxable, the portion of the price attributable to the nontaxable products is subject to tax unless the provider can identify by reasonable and verifiable standards such portion from its books and records that are kept in the regular course of business for other purposes, including non-tax purposes.
(pp) "Purchase price" means the measure subject to use tax and has the same meaning as "sales price."
(qq) "Sales tax" means the tax imposed on certain transactions pursuant to the provisions of the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.).
(rr) "Delivery charges" means charges by the seller for preparation and delivery to a location designated by the purchaser of personal property or services including, but not limited to, transportation, shipping, postage, handling, crating, and packing. If a shipment includes both exempt and taxable property, the seller should allocate the delivery charge by using: (1) a percentage based on the total sales price of the taxable property compared to the total sales price of all property in the shipment; or (2) a percentage based on the total weight of the taxable property compared to the total weight of all property in the shipment. The seller shall tax the percentage of the delivery charge allocated to the taxable property but is not required to tax the percentage allocated to the exempt property.
(ss) "Direct mail" means printed material delivered or distributed by United States mail or other delivery service to a mass audience or to addresses on a mailing list provided by the purchaser or at the direction of the purchaser in cases in which the cost of the items are not billed directly to the recipients. "Direct mail" includes tangible personal property supplied directly or indirectly by the purchaser to the direct mail seller for inclusion in the package containing the printed material. "Direct mail" does not include multiple items of printed material delivered to a single address.
(tt) "Streamlined Sales and Use Tax Agreement" means the agreement entered into as governed and authorized by the "Uniform Sales and Use Tax Administration Act," P.L.2001, c.431 (C.54:32B-44 et seq.).
(uu) "Alcoholic beverages" means beverages that are suitable for human consumption and contain one-half of one percent or more of alcohol by volume.
(vv) (Deleted by amendment, P.L.2011, c.49)
(ww) "Landscaping services" means services that result in a capital improvement to land other than structures of any kind whatsoever, such as: seeding, sodding or grass plugging of new lawns; planting trees, shrubs, hedges, plants; and clearing and filling land.
(xx) "Investigation and security services" means:
(1) investigation and detective services, including detective agencies and private investigators, and fingerprint, polygraph, missing person tracing and skip tracing services;
(2) security guard and patrol services, including bodyguard and personal protection, guard dog, guard, patrol, and security services;
(3) armored car services; and
(4) security systems services, including security, burglar, and fire alarm installation, repair or monitoring services.
(yy) "Information services" means the furnishing of information of any kind, which has been collected, compiled, or analyzed by the seller, and provided through any means or method, other than personal or individual information which is not incorporated into reports furnished to other people.
(zz) "Specified digital product" means an electronically transferred digital audio-visual work, digital audio work, or digital book; provided however, that a digital code which provides a purchaser with a right to obtain the product shall be treated in the same manner as a specified digital product.
(aaa) "Digital audio-visual work" means a series of related images which, when shown in succession, impart an impression of motion, together with accompanying sounds, if any.
(bbb) "Digital audio work" means a work that results from the fixation of a series of musical, spoken, or other sounds, including a ringtone.
(ccc) "Digital book" means a work that is generally recognized in the ordinary and usual sense as a book.
(ddd) "Transferred electronically" means obtained by the purchaser by means other than tangible storage media.
(eee) "Ringtone" means a digitized sound file that is downloaded onto a device and that may be used to alert the purchaser with respect to a communication.
(cf: P.L.2011, c.49, s.1)
19. This act shall take effect immediately; provided however, that section 12 remain inoperative until the first day of the first calendar quarter beginning at least 30 days after its date of enactment.
STATEMENT
This bill provides for the temporary deferral of certain tax collection responsibilities imposed under the sales and use tax, and revises the sales and use tax to enumerate certain persons presumed to be sellers responsible for the collection of tax.
Under the bill, certain persons who qualify will be deemed not to be a seller for a limited period. During this period, the bill provides that qualified persons will be eligible to make taxable sales of goods and services to purchases within this state without being required to register as a seller and collect and remit to the state the tax determined to be due.
The bill provides that to qualify for the deferral a person must make certain investments and create certain jobs within this State. The bill specifies that to qualify a person must, individually or in combination with a third party or a related person, meet or demonstrate the ability to meet each of the following requirements:
--place one or more customer operations and processing facilities in service within this State on or after January 1, 2012 but before September 1, 2013;
--make, or cause to be made, a capital investment of not less than $65 million within this State on or after January 1, 2012 but before December 1, 2013;
--create not fewer than 1,500 full-time jobs within this State on or after January 1, 2012 but before December 1, 2013; and
--maintain not fewer than 1,500 full-time jobs within this State for at least 59 months following the month in which the full-time job creation requirements are first met.
The bill provides that to qualify for the deferral a person must limit its activities within this State. The bill specifies that to qualify a person must limit its activities within this State to the following:
--acceptance of returns or exchanges of tangible personal property received from a customer;
--performance of a repair, maintenance, or refurbishment service;
--manufacturing and processing of tangible personal property for use in a business operation;
--negotiating certain agreements within this State or procuring certain goods and services that are subject to the sales and use tax on behalf of a person or on behalf of a related person for business operations, but not for retail sale from the business operations and processing facility within this State;
--sending a promotional or marketing message or other communication by means of electronic mail to the customer of a person or to the customer of a related person from a server within this State or from a server without this State;
--provision of a procurement service for a business operation;
--any other activity that facilitates the transfer or the delivery of a specified digital product or service, except an activity relating to a retail sale; or
--any other activity or integration relating to a business operation between the customer operations and processing facility and a person or a related person.
The bill provides that to qualify for the deferral a person must enter into an agreement with the Director of the Division of Taxation in the Department of the Treasury requiring the person to begin to collect tax at the end of the deferral period or if certain conditions are not met. The bill specifies that to qualify the person must enter into and maintain compliance with an agreement with the director requiring the person to register as a seller and to collect the sales and use tax on taxable sales of goods and services made to purchasers within this State on or after the earlier of:
--September 1, 2013;
--the date the person makes and files an application to receive financial assistance authorized by, or an application to apply for a credit against a taxpayer's liability for tax under, certain other incentive and State tax credit programs;
--the date the person ceases to maintain a customer operations and processing facility placed into service within this State to meet the requirements for the deferral;
--the date the person maintains fewer than 1,275 of the full-time jobs created within this State to meet the requirements for the deferral;
--the termination date of any law, regulation, agreement, or other binding means that provides for the temporary deferral of tax collection responsibilities in a form and a manner that is comparable to the deferral of tax collection responsibilities provided by the bill and that is entered into by the person who qualifies for the deferral with a state other than the State of New Jersey on or after the effective date of the bill;
--the effective date of a law enacted by the United States Congress that permits a state to require that its sales tax or its use tax be collected, reported, and remitted to the State even if the person required to collect the tax under that law does not have a physical presence within that state that would otherwise give the state jurisdiction to impose tax collection responsibilities under the Constitution and statutes of the United States;
--the date the person engages in an activity within this State that is sufficient to give this State jurisdiction to impose tax collection responsibilities on that person under the Constitution and statutes of the United States and that is not specified by the definition of "customer operations and processing facility," as that term is defined by the bill; or
--the date the person violates one or more of the terms and conditions of the agreement entered into with the director.
The bill provides that projects related to the construction, reconstruction, demolition, or renovation of a customer operations and processing facility placed into service within this State to meet the requirements for the deferral must include in the contract or agreement for its construction, reconstruction, demolition, or renovation an agreement that: establishes the terms and conditions of employment for each individual employed in the construction, reconstruction, demolition, or renovation of a customer operations and processing facility prior to the date any individual is hired; meets or exceeds the requirements for a public works project enumerated by section 5 of P.L.2002, c.44 (N.J.S.A.52:38-5); and is binding and enforceable on all parties directly involved in the construction, reconstruction, demolition, or renovation of the customer operations and processing facility. The bill provides that individuals employed in the construction, reconstruction, demolition, or renovation of a customer operations and processing facility by a person who has entered into an agreement are generally subject to the requirements provided by section 1 of P.L.1979, c.303 (N.J.S.A.34:1B-5.1)
The bill requires persons who qualify for the deferral to provide prominently on any sales slip, invoice, receipt, or other statement or memorandum given to its customers in connection with its sales to persons within this State of tangible personal property, specified digital products, or services notice that tax has not been collected on the customer's purchase, and that the purchaser may be required to pay any tax due in connection with the purchase directly to the State. The bill specifies that the notice must include, if applicable, the Internet link or Internet address directing a customer to any Internet website maintained and operated, or caused to be maintained and operated, by Director of the Division of Taxation to assist taxpayers in determining a liability for any tax due as a result of a customer's purchase of taxable good or services from a non-present retailer and instructions for reporting and remitting any tax due and payable to the State.
The bill requires persons who qualify for the deferral and who locate a customer operations and processing facility within a one quarter mile radius of a public transportation facility to work with the Executive Director of the New Jersey Transit Corporation and any applicable transportation management associations to establish a transportation plan that will encourage employees to use public transportation. The bill requires persons who qualify for the deferral and who locate a customer operations and processing facility at a location that is not within a one quarter mile radius of a public transportation facility to work with the Executive Director of the New Jersey Transit Corporation and any applicable transportation management associations to establish an alternative transportation plan that will provide viable commuting options to employees of the facility who are dependent on public transportation.
The bill requires persons who qualify for the deferral to make a monthly progress report furnishing, at a minimum, the following: the location of each customer operations and processing facility placed into service or maintained in service within this State during the month; the dollar value of the capital investment made, or caused to be made, within this State during the month; the number of full-time jobs created and maintained each day during the month; and the dollar value of gross receipts derived from the person's sale to purchasers within this State of tangible personal property, specified digital products, and services made during the month.
The bill imposes certain penalties on persons who qualify for the deferral if the person fails to place one or more customer operations and processing facilities in services within this State to qualify for the deferral, fails to make the capital investment within this State to qualify for the deferral, and fails to create the full-time jobs within this State to qualify for the deferral. The bill specifies that the amount of penalty required to be paid is a function of the gross receipts derived from the person's sale of goods and services made to purchasers within this State between January 1, 2012 and either September 1, 2013 or December 1, 2013.
The bill imposes certain penalties on persons who qualify for the deferral if the person ceases to maintain a customer operations and processing facility placed into service within this State to qualify for the deferral, maintains fewer than 1,500 of the full-time jobs created within this State to qualify for the deferral, and maintains fewer than 1,275 of the full-time jobs created within this State to qualify for the deferral. The bill specifies that the amount of penalty required to be paid is a function of the gross receipts derived from the person's sale of goods and services made to purchasers within this State between the time the person first meets the capital investment or full-time job creation requirements and the frame of time within which the person agrees to maintain the facility or maintain the level of full-time jobs as specified by the bill.
The bill requires the Director of the Division of Taxation to issue a tax assessment for the capture of any penalty required to be paid, and specifies the penalty is a State tax subject to the State Uniform Tax Procedure Law.
The bill provides that the deferral provided to a person who qualifies is null and void and no longer applies on or after the earlier of:
--September 1, 2013;
--the date the person who qualifies for the deferral makes and files an application to receive financial assistance authorized by, or an application to apply for a credit against a taxpayer's liability for tax under, certain other incentive and State tax credit programs;
--the date the person who qualifies for the deferral ceases to maintain a customer operations and processing facility placed into service within this State to meet the requirements for the deferral;
--the date the person who qualifies for the deferral maintains fewer than 1,275 of the full-time jobs created within this State to meet the requirements for the deferral;
--the termination date of any law, regulation, agreement, or other binding means that provides for the temporary deferral of tax collection responsibilities in a form and a manner that is comparable to the deferral of tax collection responsibilities provided by the bill and that is entered into by the person who qualifies for the deferral with a state other than the State of New Jersey on or after the effective date of the bill;
--the effective date of a law enacted by the United States Congress that permits a state to require that its sales tax or its use tax be collected, reported, and remitted directly to the State even if the person required to collect the tax under that law does not have a physical presence within that state that would otherwise give the state jurisdiction to impose tax collection responsibilities under the Constitution and statutes of the United States;
--the date the person who qualifies for the deferral engages in an activity within this State that is sufficient to give this State jurisdiction to impose tax collection responsibilities on that person under the Constitution and statutes of the United States and that is not specified by the definition of "customer operations and processing facility," as that term is defined by section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill); or
--the date the person who qualifies for the deferral violates one or more of the terms and conditions of the agreement entered into with the director.
The bill revises the sales and use tax to amend the definition of "seller" to create a rebuttable presumption that a person is a seller required to collect and remit sales and use tax on taxable sales to purchasers in the State if another person conducts activities in this State that are significantly associated with the person's ability to establish and maintain a market in this State for the person's sales.
The bill provides that the presumption will be presumed to be a seller may be rebutted by demonstrating to the director that the activities conducted in this state are not significantly associated with the persons ability to establish or maintain a market in this state for the person's sales.
The bill authorizes the Director of the Division of Taxation, in consultation with the Executive Director of the Economic Development Authority, to adopt regulations necessary to effectuate the purposes of the bill, and permits the director to make an immediate filing of those regulations, effective for a period of not more than 360 days.
The bill takes effect immediately upon enactment.
