SALT Report 1424 – A bill was introduced in the New Jersey Assembly which offers a temporary deferment of sales and use tax collection responsibilities to qualified businesses. AB 2608 would also revise the sales and use tax laws to define “persons presumed to be sellers responsible for the collection of tax.”
To qualify for the deferment, businesses must meet the following requirements as of January 1, 2012 or before September 1, 2013:
- Place one or more customer operations or processing facility
- Make, or cause to be made, a capital investment of at least $65 million
- Create at least 1,500 full-time jobs which must be retained for the 59 months following the month in which the job creation requirements are met, and
- Acceptance of returns or exchanges of tangible personal property received from a customer
- Repair, maintenance, or refurbishment services
- Manufacturing and processing of tangible personal property for use in a business operation
- Negotiating certain agreements within New Jersey or procuring certain goods and services that are subject to sales and use tax on behalf of a related business operation, Items must not be for retail sale from the business operations and processing facility within the state
- Sending promotional or marketing messages by electronic mail to the customer of a person from a server within the state or from a server outside the state
- Procurement services for a business operation
- Any other activity that facilitates the transfer or delivery of a specified digital product or service, except an activity relating to a retail sale
Businesses that meet the above requirements and qualify for the deferral would not to be considered sellers for a limited period and would be eligible to make taxable sales to purchasers within New Jersey without being required to register as a seller or collect and remit taxes.
Failure to comply with any of the above requirements shall result in penalties of 7% of the gross receipts on all sales of tangible personal property, specified digital products, or services in New Jersey made on or after January 1, 2012 but before September 1, 2013.
AB 2608 revises the definition of “seller” to allow a rebuttable presumption that a person is a seller and required to collect and remit sales and use tax in New Jersey. Persons must demonstrate that the business activities conducted in New Jersey are not significantly associated with the person’s ability to establish or maintain a market in New Jersey.
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