Patch- And now you're going to have to dig even deeper into your pocket on Thursday if you live in New Jersey. A sales tax imposed on online retail purchases went into effect on Nov. 1. The new law (A-4496) will require certain remote sellers and online marketplace businesses to collect and remit sales tax. New Jersey has a 6.625 percent state sales tax. That means you're going to have to pay more for those eBay purchases that were always a little cheaper than what you would have spent at the mall.
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 signed the bill into law soon afterward.
The hike comes after a tax on e-cigarettes and airbnbs took effect last month. Also, the gas tax was hiked 4.3 cents in October, according to the state Department of Treasury. Lower fuel consumption over the last two years necessitated the hike, state officials said.
What triggered the gas tax hike is a little-talked-about provision in the recent 23 cent gas-tax increase that could either hike, reduce or keep the gas tax the same based on consumption. The change depends on how much of the tax has been collected over the past year to fund the Transportation Trust Fund, which pays for important and emergency road projects.
Thank you Gov Phil Murphy
ReplyDeleteThank you Lakewood Vaad