New Jersey – Tax Responsibilities of Persons Deemed Sellers

SALT Report 1445 – The New Jersey Legislature passed a bill that, effective immediately, revises the definition of “persons deemed sellers” in New Jersey.  Under A2003, a person would be deemed a seller and would be required to collect and remit sales tax in the state if they meet the following conditions:

  • Owns, in whole or part, a business within New Jersey and sells the same or similar type of product as a New Jersey entity under the same or similar business name
  • Uses the in-state facilities or employees of a New Jersey entity,
  • Uses an in-state entity to advertise or solicit sales
  • Maintains an office, a distribution facility, a warehouse or a storage facility in New Jersey and delivers property or products sold by the person to their customers
  • Generates revenue from the lease or rental of tangible personal property within New Jersey
  • Any person who is part of a controlled group of corporations and has a member engaged in business in New Jersey would be presumed to be a seller. This presumption may be rebutted by providing evidence that the member did not engage in any activities on behalf of the person, or
  • Makes sales to purchasers in New Jersey through the Internet, mail, or by telephone, and has a contract with a New Jersey entity to deliver, install, assemble, or provide maintenance services
The definition “persons required to collect tax” or “persons required to collect any tax imposed by this act” would include: sellers of tangible personal property or specified digital products and services; recipients of amusement charges; hotel operators; sellers of telecommunications services; anyone who collects initiation fees, membership fees or dues for access to health and fitness clubs, athletic clubs, sporting clubs or shopping clubs; and those that collect fees for parking, storing or garaging a motor vehicle.
Additionally, the Director of the Division of Taxation would be authorized to regard any affiliated person, dealer, distributer, supervisor, or employer operating in New Jersey, regardless of whether they are making sales on behalf of a New Jersey entity or not, as a seller if the Director deems it necessary.
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