Bill Text: NJ S2051 | 2018-2019 | Regular Session | Amended
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) 2018-06-18 - Reported from Senate Committee with Amendments, 2nd Reading [S2051 Detail]
Download: New_Jersey-2018-S2051-Amended.html
Sponsored by:
Senator 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 reported by the Senate Budget and Appropriations Committee on June 18, 2018, with amendments.
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.) 1and making an appropriation1.
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 1[catalogue] catalog1, or by other remote means and delivered 1[to the person]1 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 1[may be accessed through information and documents posted] to the State are available1 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 1[sales] sale1 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 1[catalogue] catalog1, or by other remote means and delivered 1[to the person]1 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 1[may be accessed through information and documents posted] to the State are available1 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 1[each person within this State to whom a sale] all sales1 of tangible personal property or 1[a]1 specified digital 1[product was] products that were1 made 1to each person within this State1 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. 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. "Person" also includes a marketplace provider.
(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 .
A person making sales of tangible personal property, specified digital products, or services taxable under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) shall be presumed to be soliciting business through an independent contractor or other representative if the person making sales enters into an agreement with an independent contractor having physical presence in this State or other representative having physical presence in this State, for a commission or other consideration, under which the independent contractor or representative directly or indirectly refers potential customers, whether by a link on an internet website or otherwise, and the cumulative gross receipts from sales to customers in this State who were referred by all independent contractors or representatives that have this type of an agreement with the person making sales are in excess of $10,000 during the preceding four quarterly periods ending on the last day of March, June, September, and December. This presumption may be rebutted by proof that the independent contractor or representative with whom the person making sales has an agreement did not engage in any solicitation in the State on behalf of the person that would satisfy the nexus requirements of the United States Constitution during the four quarterly periods in question. Nothing in this subparagraph shall be construed to narrow the scope of the terms independent contractor or other representative for purposes of any other provision of the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.);
(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.
(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; 1every marketplace provider;1 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.
(fff) "Marketplace provider" means a person who, pursuant to an agreement with a Marketplace seller, facilitates sales of tangible personal property or specified digital products by such marketplace seller or sellers. A person facilitates sales of tangible personal property or specified digital products when the person meets both of the following conditions:
(1) Such person provides the forum in which, or by means of which, the sale takes place or the offer of sale is accepted, including a shop, store, booth, catalog, an internet website, or similar forum; and
(2) Such person or an affiliate of such person collects the receipts paid by a customer to a marketplace seller for a sale of tangible personal property or specified digital products, or contracts with a third party to collect such receipts. For purposes of this paragraph, two persons are affiliated if one person has an ownership interest of more than five percent, whether direct or indirect, in the other, or where an ownership interest of more than five percent, whether direct or indirect, is held in each of such persons by another person or by a group of other persons that are affiliated persons with respect to each other.
(ggg) "Marketplace seller" means a person, whether or not such person is registered to collect and remit New Jersey sales and use tax, who has an agreement with a marketplace provider under which the marketplace provider will facilitate sales of tangible personal property or specified digital products by such person.1
(cf: P.L.2014, c.13, s.4)
115. In addition to the amounts appropriated to the Division of Taxation for Taxation Services and Administration, such additional amounts as may be necessary shall be annually appropriated to fund administrative costs of the collecting and processing of reports and determining taxes owed to the State, including but not limited to the services of auditors and investigators required to effectuate the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill), subject to the approval of the Director of the Division of Budget and Accounting.1
1[14] 161. 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 1[January] October1 1 next following the date of enactment.
