Bill Text: NJ A4600 | 2016-2017 | Regular Session | Introduced


Bill Title: Imposes certain notification and reporting requirements on certain persons not required or authorized to collect sales and use tax.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2017-02-15 - Introduced, Referred to Assembly Budget Committee [A4600 Detail]

Download: New_Jersey-2016-A4600-Introduced.html

ASSEMBLY, No. 4600

STATE OF NEW JERSEY

217th LEGISLATURE

 

INTRODUCED FEBRUARY 15, 2017

 


 

Sponsored by:

Assemblyman  TROY SINGLETON

District 7 (Burlington)

 

 

 

 

SYNOPSIS

     Imposes certain notification and reporting requirements on certain persons not required or authorized to collect sales and use tax.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act imposing certain notification and reporting requirements on certain persons not required or authorized to collect the sales and use tax, 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.  A person who makes a sale to a person within this State of tangible personal property or a specified digital product, the sale or the use of which is subject to the tax imposed pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), but who is not required or otherwise authorized by the director to collect the tax imposed pursuant to P.L.1966, c.30 (C.54:32B-1 et seq.) shall be required to give notice to the person within this State to whom the sale is made informing the person of that person's responsibility to pay any use tax liability that may be due and required to be paid in connection with the sale of the tangible personal property or specified digital product. 

     b.    The notice shall inform the person within this State to whom the sale is made that the person selling the tangible personal property or specified digital product is not required or otherwise authorized by the director to collect the tax. 

     c.     The notice shall inform the person within this State to whom the sale is made that the sale of tangible personal property or a specified digital product is generally subject to New Jersey use tax unless the tangible personal property or specified digital product is exempt or excluded from taxation or the person within this State to whom the sales is made has been issued an exemption certificate by the director, has been authorized to issue an exemption certificate in accordance with the Streamlined Sales and Use Tax Agreement, or is an exempt governmental entity.   

     d.    The notice shall inform the person within this State to whom the sale is made that the sale of tangible personal property or a specified digital product is not exempt or excluded from taxation because the sale is made over the Internet, by mail order catalogue, or by other remote means and delivered to the person within this State by mail or other common carrier.

     e.     The notice shall inform the person within this State to whom the sale is made that it is the responsibility of that person to report and pay to the State any use tax liability that may be due on a taxable sale of tangible personal property or a specified digital product, and shall inform the person within this State to whom the sale is made that a use tax liability can be reported and paid to the State through the person's gross income tax return or by filing an individual or business use tax return. 

     f.     The notice shall inform the person within this State to whom the sale is made that not reporting or underreporting a use tax liability may result in the imposition of penalties or interest or a combination of penalties and interest.    

     g.    The notice shall inform the person within this State to whom the sale is made that additional information regarding the New Jersey use tax and instructions and forms necessary to report and pay a use tax liability may be accessed through information and documents posted on the Division of Taxation's website, www.state.nj.us/treasury/taxation/.  

     h.    The notice shall be prominently displayed on the sales slip, invoice, receipt, bill, or other similar statement or memorandum given to the person within this State to whom the sale is made at the time the sale is made. 

 

     2.    a.  A person who makes a sale to a person within this State of tangible personal property or a specified digital product, the sale or the use of which is subject to the tax imposed pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), but who is not required or otherwise authorized by the director to collect the tax imposed pursuant to P.L.1966, c.30 (C.54:32B-1 et seq.) shall provide an annual report to the person within this State to whom the sale was made informing the person of all sales that were made to the person during the calendar year preceding the calendar year in which the report is required to be sent to the person in accordance with this section. 

     b.    The report shall provide a list, by date, indicating each item of tangible personal property or specified digital product that was sold to the person within this State, and the price of each item of tangible personal property or specified digital product that was sold to the person within this State, during the calendar year to which the report applies.   

     c.     The report shall inform the person within this State to whom a sale was made that the person selling the tangible personal property or specified digital product was not required or otherwise authorized by the director to collect the tax. 

     d.    The report shall inform the person within this State to whom a sale was made that the sale of tangible personal property or a specified digital product is generally subject to New Jersey use tax unless the tangible personal property or specified digital product is exempt or excluded from taxation or the person within this State to whom the sales is made has been issued an exemption certificate by the director, has been authorized to issue an exemption certificate in accordance with the Streamlined Sales and Use Tax Agreement, or is an exempt governmental entity. 

     e.     The report shall inform the person within this State to whom the sale was made that the sale of tangible personal property or a specified digital product is not exempt or excluded from taxation because the sale was made over the Internet, by mail order catalogue, or by other remote means and delivered to the person within this State by mail or other common carrier.

     f.     The report shall inform the person within this State to whom the sale was made that it is the responsibility of that person to report and pay to the State any use tax liability that may be due on a taxable sale of tangible personal property or a specified digital product, and shall inform the person within this State to whom the sale was made that a use tax liability can be reported and paid to the State through the person's gross income tax return or by filing an individual or business use tax return. 

     g.    The report shall inform the person within this State to whom a sale was made that the person making the sale of tangible personal property or a specified digital product is required to provide an annual report to the director in accordance with section 3 of P.L.    , c.   (C.       ) (pending before the Legislature as this bill) informing the director of all sales that were made to persons within this State during the calendar year to which the report applies. 

     h.    The report shall inform the person within this State to whom a sale was made that not reporting or underreporting a use tax liability may result in the imposition of penalties or interest or a combination of penalties and interest.    

     i.     The report shall inform the person within this State to whom the sale was made that additional information regarding the New Jersey use tax and instructions and forms necessary to report and pay a use tax liability may be accessed through information and documents posted on the Division of Taxation's website, www.state.nj.us/treasury/taxation/.  

     j.     The report shall be sent by mail to the last known billing address of the person within this State to whom the sale was made, or if the billing address is unknown, to the last known shipping address of the person within this State to whom the sale was made, in an envelope marked prominently with words indicating important tax information is enclosed, on or before January 31st of each calendar year immediately following a calendar year in which a sale was made to a person within this State of tangible personal property or a specified digital product; provided, that if the billing address and the shipping address of the person within this State to whom a sale was made are unknown, the report shall be sent electronically to the last known email address of the person within this State to whom a sale was made with a subject heading indicating important tax information is attached or included. 

 

     3.    a.  A person who makes a sale to a person within this State of tangible personal property or a specified digital product, the sale or the use of which is subject to the tax imposed pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), but who is not required or otherwise authorized by the director to collect the tax imposed pursuant to P.L.1966, c.30 (C.54:32B-1 et seq.) shall provide an annual report to the director informing the director of all sales that were made to persons within this State during the calendar year preceding the calendar year in which the report is required to be transmitted to the director in accordance with this section. 

     b.    The report shall identify the name of each person within this State to whom a sale of tangible personal property or a specified digital product was made during the calendar year to which the report applies. 

     c.     The report shall identify the billing address and, if different, the last known mailing address of each person within this State to whom a sale of tangible personal property or a specified digital product was made during the calendar year to which the report applies. 

     d.    The report shall include the shipping address of each person within this State to whom a sale of tangible personal property or a specified digital product was made during the calendar year to which the report applies. 

     e.     The report shall include the dollar amount of all sales of tangible personal property and specified digital products that were made to each person within this State during the calendar year to which the report applies. 

     f.     The report shall be transmitted electronically to the director on or before January 31st of each year immediately following a year in which a sale was made to a person within this State. 

 

     4.    A person who made less than $200,000 in gross sales of tangible personal property and specified digital products during the calendar year preceding the calendar year in which a sale, that is subject to the notification requirements imposed by section 1 of P.L.    , c.   (C.       ) (pending before the Legislature as this bill), is made shall not be required to give notices and provide reports as required to be given and provided by sections 1, 2, and 3 of P.L.    , c.   (C.       ) (pending before the Legislature as this bill). 

 

     5.    A person who made less than $100,000 in gross sales of tangible personal property and specified digital products to persons within this State during the calendar year preceding the calendar year in which a sale, that is subject to the notification requirements imposed by section 1 of P.L.    , c.   (C.       ) (pending before the Legislature as this bill), is made shall not be required to give notices and provide reports as required to be given and provided by sections 1, 2, and 3 of P.L.    , c.   (C.       ) (pending before the Legislature as this bill). 

 

     6.    A person who is required or otherwise authorized by the director to collect the tax imposed pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), and who complies in good faith with all other duties and responsibilities imposed on a seller in accordance with P.L.1966, c.30 (C.54:32B-1 et seq.) shall not be required to give notices and provide reports as required to be given and provided by sections 1, 2, and 3 of P.L.    , c.   (C.       ) (pending before the Legislature as this bill).

 

     7.    a.  A person who fails to give notice to a person within this State to whom a sale is made as required to be given by section 1 of P.L.    , c.   (C.       ) (pending before the Legislature as this bill) shall be subject to a penalty of $25 for each failure to give notice.

     b.    The director shall assess the amount of any penalty determined to be due in accordance with this section using information that may be obtained by the director or any reasonable sampling or estimation techniques determined to be necessary or appropriate by the director to determine the number of failures to give notice, give notice of the assessment to the person subject to the penalty, and make demand upon the person for payment to be made within 30 days of the date notice is given to the person by the director. 

     c.     Interest shall accrue and be due on the amount of any penalty assessed by the director in accordance with this section that is not paid within 30 days of the date notice is given to the person subject to the penalty by the director at a rate equal to the rate of interest assessed on an unpaid State tax in accordance with R.S.54:49-3, from the date the notice was given to the person by the director until the date payment is received by the director.  

     d.    Penalties and interest due and required to be paid in accordance with this section shall be treated as a deficiency with respect to the payment of a State tax:  the director shall be provided all rights, powers, and duties authorized by the State Uniform Tax Procedure Law, R.S.54:48-1 et seq., to ensure the payment, collection, or recovery of the deficiency and the person subject to any penalty or interest in accordance with this section shall be afforded all protections, rights, and remedies allowed by  R.S.54:48-1 et seq. to challenge, protest, or appeal the deficiency or any determination or decision made in connection with the deficiency.  

 

     8.    a.  A person who fails to provide an annual report to a person within this State to whom a sale is made as required to be provided by section 2 of P.L.    , c.   (C.       ) (pending before the Legislature as this bill) shall be subject to a penalty of $100 for each failure to provide a report.

     b.    The director shall assess the amount of any penalty determined to be due in accordance with this section using information that may be obtained by the director or any reasonable sampling or estimation techniques determined to be necessary or appropriate by the director to determine the number of failures to provide an annual report, give notice of the assessment to the person subject to the penalty, and make demand upon the person for payment to be made within 30 days of the date notice is given to the person by the director. 

     c.     Interest shall accrue and be due on the amount of any penalty assessed by the director in accordance with this section that is not paid within 30 days of the date notice is given to the person subject to the penalty by the director at a rate equal to the rate of interest assessed on an unpaid State tax in accordance with R.S.54:49-3, from the date the notice was given to the person by the director until the date payment is received by the director.  

     d.    Penalties and interest due and required to be paid in accordance with this section shall be treated as a deficiency with respect to the payment of a State tax:  the director shall be provided all rights, powers, and duties authorized by the State Uniform Tax Procedure Law, R.S.54:48-1 et seq., to ensure the payment, collection, or recovery of the deficiency and the person subject to any penalty or interest in accordance with this section shall be afforded all protections, rights, and remedies allowed by  R.S.54:48-1 et seq. to challenge, protest, or appeal the deficiency or any determination or decision made in connection with the deficiency.  

 

     9.    a.  A person who fails to provide an annual report to the director as required to be provided by section 3 of P.L.    , c.   (C.       ) (pending before the Legislature as this bill) shall be subject to a penalty of $1,000 for each failure to provide a report.

     b.    The director shall assess the amount of any penalty determined to be due in accordance with this section using information that may be obtained by the director or any reasonable sampling or estimation techniques determined to be necessary or appropriate by the director to determine the number of failures to provide an annual report, give notice of the assessment to the person subject to the penalty, and make demand upon the person for payment to be made within 30 days of the date notice is given to the person by the director. 

     c.     Interest shall accrue and be due on the amount of any penalty assessed by the director in accordance with this section that is not paid within 30 days of the date notice is given to the person subject to the penalty by the director at a rate equal to the rate of interest assessed on an unpaid State tax in accordance with R.S.54:49-3, from the date the notice was given to the person by the director until the date payment is received by the director.  

     d.    Penalties and interest due and required to be paid in accordance with this section shall be treated as a deficiency with respect to the payment of a State tax:  the director shall be provided all rights, powers, and duties authorized by the State Uniform Tax Procedure Law, R.S.54:48-1 et seq., to ensure the payment, collection, or recovery of the deficiency and the person subject to any penalty or interest in accordance with this section shall be afforded all protections, rights, and remedies allowed by  R.S.54:48-1 et seq. to challenge, protest, or appeal the deficiency or any determination or decision made in connection with the deficiency.  

 

     10.  An annual report and any information derived from an annual report or otherwise received by the director from a person who is required to provide an annual report to the director in accordance with section 3 of P.L.    , c.   (C.       ) (pending before the Legislature as this bill) shall not be considered a public or government record for purposes of P.L.1963, c.73 (C.47:1A-1 et seq.) or P.L.2001, c.404 (C.47:1A-5 et al.). 

 

     11.  An annual report and any information derived from an annual report or otherwise received by the director from a person who is required to provide an annual report to the director in accordance with section 3 of P.L.    , c.   (C.       ) (pending before the Legislature as this bill) shall be treated as a confidential record or file of the director in accordance with R.S.54:50-8, and all exceptions, penalties, punishments, and remedies applicable to the unauthorized disclosure, use, or examination of confidential taxpayer information shall apply to the unauthorized disclosure, use, or examination of an annual report or any information derived from an annual report or otherwise received by the director from a person who is required to provide an annual report to the director in accordance with section 3 of P.L.    , c.   (C.       ) (pending before the Legislature as this bill). 

    

     12.  Nothing contained in P.L.    , c.   (C.        ) (pending before the Legislature as this bill) shall relieve a person who is subject to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), from any responsibilities imposed thereunder, or prevent the director from administering and enforcing the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), with respect to any person who is subject to the tax.      

 

     13.  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 rules and regulations as the director determines to be necessary and appropriate to effectuate the purposes of P.L.    , c.   (C.       ) (pending before the Legislature as this bill), which rules and regulations shall be effective for a period not to exceed 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.).  

 

     14.  This act shall take effect immediately and apply to sales of tangible personal property and specified digital products made to persons within this State on or after January 1 next following the date of enactment. 

 

 

STATEMENT

 

     This bill imposes certain notification and reporting requirements on certain persons who are not required or otherwise authorized by the Director of the Division of Taxation in the Department of the Treasury to collect the sales and use tax.  Under the bill, persons who make taxable sales to persons within this State of tangible personal property or specified digital products, but who are not required or otherwise authorized by the director to collect the tax must provide notices and annual reports regarding purchases and potential use tax liabilities to purchasers and the director, unless the person has annual gross sales of less than $200,000 or annual gross sales to purchasers in New Jersey of less than $100,000.       

     Notices to Customers.  The bill requires persons who make taxable sales to persons within this State of tangible personal property or specified digital products, but who are not required or otherwise authorized to collect the tax to give notices to each person within this State to whom a sale is made informing the person of that person's responsibility to pay any use tax liability that may be due and required to be paid to the State in connection with the sale.  The bill provides that the notices must inform the person within this State that the person making the sale is not required or otherwise authorized to collect the tax, that the person within this State is responsible for any use tax liability that may be due, and that any use tax liability that may be due can be reported and paid to the State through the person's gross income tax return or a separate use tax return.  The bill specifies that the notices must be prominently displayed on the sales slip, invoice, receipt, bill, or other similar statement or memorandum given to the person within this State at the time the sale is made.   

     Annual Reports to Customers. The bill requires persons who make taxable sales to persons within this State of tangible personal property or specified digital products, but who are not required or otherwise authorized to collect the tax to provide an annual report to each person within this State to whom a sale is made informing the person of all sales that were made to the person during the preceding calendar year.  The bill provides that, in addition to information given at the time a sale is made, the annual report must provide a list, by date, indicating each item or product that was sold and the price of each item that was sold to the person within this State during the preceding calendar year, and must inform persons within this State that the person making the sale is required to disclose information regarding sales to persons within this State to Director of the Division of Taxation.  The bill specifies that the annual report must be sent by mail to the last known billing or shipping address of the person within this State on or before January 31st of each year immediately following a year in which a sale was made. 

     Annual Reports to Director of Taxation.  The bill requires persons who make taxable sales to persons within this State of tangible personal property or specified digital products, but who are not required or otherwise authorized to collect the tax to provide an annual report to the Director of the Division of Taxation disclosing information regarding all sales made to persons within this State during the preceding calendar year.  The bill provides that the annual report must include, with respect to each sale made to a person within this State, the name of the person, the billing address and, if different, the last known mailing address of the person, the shipping address of the person, and the total dollar amount of all sales that were made during the preceding calendar year.  The bill specifies that the annual report must be transmitted electronically to the director on or before January 31st of each year immediately following a year in which a sale was made to a person within this State.

     Exclusions. The bill excludes certain persons from the notification and reporting requirements.  The bill provides that persons who made less than $200,000 in gross sales of tangible personal property and specified digital products during the preceding calendar year, persons who made less than $100,000 in gross sales of tangible personal property and specified digital products to persons within this State during the preceding calendar year, and persons who are required or otherwise authorized by the Director of the Division of Taxation to collect the sales and use tax are not required to give notices or provide reports in accordance with the bill. 

     Penalties. The bill imposes penalties on persons who fail to give notices or provide reports.  The bill provides that a penalty of $25 will be imposed for each failure to give a notice to a purchaser within this State at the time a sale is made, a penalty of $100 will be imposed for each failure to provide an annual report to each purchaser within this State, and a penalty of $1,000 will be imposed for each failure to provide an annual report to the Director of the Division of Taxation.  The bill authorizes the director to assess the amount of any penalty determined to be due, permits interest to accrue on unpaid penalties, and allows the director to treat any unpaid penalties and interest as a deficiency of a State tax for collection and enforcement purposes.   

     Confidentiality. The bill provides that an annual report and any information derived from the report or otherwise received by the Director of the Division of Taxation from a person who is required to provide an annual report in accordance with the bill will not be considered a public or government record for purposes of the State's open public records laws.  The bill provides that an annual report and any information derived from the report or otherwise received by the director from a person who is required to provide an annual report to the director will be treated as confidential taxpayer information, and provides that all exceptions, penalties, punishments, and remedies applicable to the unauthorized disclosure, use, or examination of confidential taxpayer information under current law will apply to the unauthorized disclosure, use, or examination of an annual report or any information derived from an annual report or otherwise received by the director from a person who is required to provide an annual report to the director. 

     Relief from Liability.  The bill provides that nothing contained in the bill will relieve a person who is subject to the sales and use tax from any duties and responsibilities imposed on sellers under current law.  The bill provides that nothing contained in the bill will prevent the Director of the Division of Taxation from administering and enforcing the sales and use tax with respect to a person who is subject to the tax.

     Rules and Regulations. The bill authorizes the Director of the Division of Taxation to adopt rules and regulations to effectuate the purposes of the bill, and permits the immediate filing of those rules and regulations with the Office of Administrative Law, effective for a period not to exceed 360 days following the bill's effective date.

     Effective Date. The bill takes effect immediately and applies to sales of tangible personal property and specified digital products made to persons within this State on or after January 1 next following the date of enactment. 

     The purpose of this bill is to provide New Jersey residents with greater access to information regarding purchases from remote, out-of-State retailers, and to assist the Director of the Division of Taxation in the collection and enforcement of the sales and use tax. The additional information will permit residents to fulfill use tax responsibilities when purchasing taxable goods from retailers not required or otherwise authorized to collect the tax, and allow the director to identify residents who fail to comply with current law.

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