NJ Gov. Phil Murphy Signs 12 Bills Into Law, Including A New Tax

New Jersey Gov. Phil Murphy has signed 12 bills into law that could have a big impact on your life, including legislation that will impose a sales tax on online retail sales. The tax is supposed to take effect on Nov. 1.

The new law (A-4496) will require certain remote sellers and online marketplace businesses to collect and remit sales tax.

Under the law, a seller must collect taxes if it does not have a physical presence in New Jersey but has revenue from sales in the state during the calendar year, or prior year, in excess of $100,000, according to lawmakers.

The same rule will apply to a seller with 200 or more separate transactions in the state during a calendar year or in the prior year.

The tax legislation, sponsored by Assemblymen John Burzichelli and Paul Moriarty, is intended to ensure a "level playing field" between brick-and-mortar businesses and online marketplace providers like Amazon. The lawmakers say it will also bring in needed revenue to the state.

“This will help provide parity among brick-and-mortar businesses and online marketplaces and provide the state with needed revenue,” said Burzichelli, D-Cumberland/Gloucester/Salem). “Online marketplaces have made it easier for interstate and international commerce, allowing many businesses to circumvent state sales tax requirements. New Jersey based businesses have to abide by the sales and use tax law, and so should any company who does substantial business in the state.”

New Jersey could gain between $216 million and $351 million as a result of this legislation — about 2 to 4 percent of total 2016 state and local government general sales and gross receipts tax revenues — according to the United States Government Accountability Office (GAO) study in November 2017.

Forty-five states and the District of Columbia levy taxes on the sale of goods and certain services, including those sold remotely, such as over the Internet, according to the lawmakers.

These provisions of the law reflect the recent decision of the United States Supreme Court in South Dakota v. Wayfair, Inc., in which the court determined that having a physical presence within a state was not a prerequisite for the collection of sales tax on purchases of tangible personal property.

In that case, the court held that imposing sales tax on a seller that delivers more than $100,000 worth of sales into a state or delivers 200 or more separate transactions into a state has a sufficient nexus with the state for the state to impose tax on the seller.

“The fact that they are not physically located in New Jersey should not exempt a business from sales tax and use requirements,” said Moriarty, D- Camden/Gloucester. “These businesses should play by the same rules as other NJ businesses who pay property taxes, local taxes and make an investment in the communities they're in."

The bill was approved 43-35 by the Assembly and 23-14 by the Senate on Sept. 27.

Murphy also signed the following bills into law:

• A1053 w/GR (Houghtaling, Taliaferro, Andrzejczak/Van Drew) – Revises and expands laws on trespass and vandalism on agricultural and horticultural lands.
• A2762 w/GR (Greenwald, Mukherji, Conaway/Ruiz, Singleton) – Revises law concerning temporary disability leave.
• A2763 w/GR (Greenwald, Downey, Pintor Marin/Cruz-Perez) – Requires additional data in annual temporary disability and family leave insurance reports.
• A3683 w/GR (Murphy, McKnight, Jones/Madden, Vitale) – Authorizes parking privileges for certain healthcare workers who render care at patients’ home residences.
• A3703 w/GR (DeAngelo/Cryan, Sweeney) – Revises ownership standards and exemptions under HVACR license law.
• A3754 w/GR (McKnight, Speight, Barclay/Madden) – Exempts persons providing hair braiding services from licensure requirement, requires registration of hair braiding establishments.
• A3808 w/GR (Greenwald, Bramnick, Murphy/Singleton, Oroho) – Provides for prompt payment of public contracts for purchase of goods and services.
• A4118 w/GR (Swain, Tully, Murphy/Ruiz, Diegnan) – Permits individuals to submit TDI and family temporary disability leave claims to DOLWD prior to commencement of leave under certain circumstances and requires timely payment of benefits for such claims.
• A4181 w/GR (Jones, Murphy/Cruz-Perez) – Clarifies that employees of renaissance school projects are in state administered retirement systems.
• A4230 w/GR (Burzichelli, Mukherji, Houghtaling, Downey/Gopal, Sarlo) – Changes use of certain revenue derived from sports wagering at racetracks.
• A4495 (Pintor Marin/Sarlo, Singleton) – Amends provisions regarding tax base and operative dates relative to CBT and combined reporting; provides CBT deduction in amount of certain foreign-related income; clarifies tax treatment of certain tax credits awarded by EDA.
• A4496 (Burzichelli, Moriarty/Singleton) – Provides for collection of sales tax by marketplace facilitators and certain remote sellers, and clarifies collection of taxes related to hotel and transient accommodation occupancies.

Governor Murphy photo