Bill Text: NJ S2108 | 2018-2019 | Regular Session | Introduced
Bill Title: Provides sales and use tax exemption for sales of certain services to certain business-use personal property.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2018-03-28 - Reviewed by the Sales Tax Review Commission Recommend to enact [S2108 Detail]
Download: New_Jersey-2018-S2108-Introduced.html
Sponsored by:
Senator ANTHONY R. BUCCO
District 25 (Morris and Somerset)
SYNOPSIS
Provides sales and use tax exemption for sales of certain services to certain business-use personal property.
CURRENT VERSION OF TEXT
As introduced.
An Act providing a sales and use tax exemption for sales of certain services to certain business-use personal property, 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. Receipts from charges for installing, maintaining, servicing, or repairing the following personal property are exempt from the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.):
machinery, apparatus, or equipment that is used or consumed directly and primarily in the production of tangible personal property by manufacturing, processing, assembling, or refining and that is exempt from taxation pursuant to subsection a. of section 25 of P.L.1980, c.105 (C.54:32B-8.13);
machinery, apparatus, or equipment sold to a service provider subject to the jurisdiction of the Board of Public Utilities or the Federal Communications Commission, for use directly and primarily in receiving at destination or initiating, transmitting, and switching telephone, telegraph, or interactive telecommunications service for sale to the general public that is exempt from taxation pursuant to subsection c. of section 25 of P.L.1980, c.105 (C.54:32B-8.13);
machinery, apparatus, or equipment, having a useful life exceeding one year, other than that used in the construction or operation of towers, to a commercial broadcaster operating under a broadcasting license issued by the Federal Communications Commission or to a provider of cable/satellite television program services for use or consumption directly and primarily in the production or transmission of radio or television information that is exempt from taxation pursuant to subsection e. of section 25 of P.L.1980, c.105 (C.54:32B-8.13); and
tangible personal property for use or consumption directly and exclusively in research and development in the experimental or laboratory sense that is exempt from taxation pursuant to section 26 of P.L.1980, c.105 (C.54:32B-8.14).
2. Except as otherwise provided in the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), receipts received from all services of installing, maintaining, servicing, or repairing personal property rendered on or after January 1, 2018 but before July 1, 2018 are subject to the taxes imposed under paragraph (2) of subsection (b) of section 3 of P.L.1966, c.30 (C.54:32B-3), at the rate of 6.625 percent, except if the services so sold are rendered on or after July 1, 2018, in which case the tax shall be computed and paid at a rate of 0.0 percent in accordance with the exemption provided by section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill); provided however, that if an installation, maintenance, service, or repair contract or agreement taxable under P.L.1966, c.30 (C.54:32B-1 et seq.) covers any period of more than one month commencing before July 1, 2018 and ending after July 1, 2018, the receipts from such contract or agreement are subject to tax at the rate applicable to each period as set forth hereinabove and shall be apportioned on the basis of the ratio of the number of days falling within each of the said periods to the total number of days covered thereby, and provided further that if any such contract or agreement covers any period of one month or less ending after July 1, 2018 the tax shall be computed and paid at a rate of 0.0 percent.
3. This act shall take effect immediately and section 1 shall remain inoperative until July 1, 2018.
STATEMENT
This bill provides a sales tax exemption for charges for installing, maintaining, servicing, or repairing certain business property.
Under current law, sales of manufacturing equipment, equipment for providing regulated public interactive telecommunications services, equipment used in providing broadcast or cable television or radio information, and property used in experimental research and development are generally exempt from the sales and use tax.
However, charges for services that are typically performed on that equipment are taxable. Persons that install, maintain, service, or repair tax-exempt machinery, apparatus, and equipment must charge and collect sales tax on charges for their services.
This bill extends the current exemption to the charges for those currently taxable services. Under this bill, both the initial sale of the business property and any charges by contractors, subcontractors, or other repairpersons for service performed to install, maintain, service, or repair the property are exempt from sales and use taxation.
The bill is operative July 1, 2018.
