BillTrack50 logo
Free Signup Login
Bill

Bill > A5101

NJ A5101

NJ A5101
Eliminates transaction nexus requirement under Sales and Use Tax and Corporation Business Tax.

summary

Introduced
12/12/2024
In Committee
12/12/2024
Crossed Over
Passed
Dead
01/12/2026

Introduced Session

2024-2025 Regular Session

Bill Summary

This bill amends current law to modify the criteria for determining when a remote seller is subject to the Sales and Use Tax Act and required to collect and remit sales tax to the State, and when a corporation is subject to taxes imposed under the Corporation Business Tax (CBT). Under current law, the Sales and Use Tax Act provides that a seller who makes retail sales of tangible personal property, specified digital products, or taxable services for delivery into New Jersey, without having a physical presence in the state, is required to collect and remit the Sales and Use Tax if: (1) the seller's gross revenue from taxable transactions delivered into New Jersey exceeds $100,000 in the current or prior calendar year; or (2) the seller made 200 or more separate taxable transactions for delivery into New Jersey during the current or prior calendar year. Similarly, under current law, the Corporation Business Tax Act provides that a corporation that derives receipts from sources within the State is subject to the CBT if: (1) the corporation derives receipts from sources within the State in excess of $100,000 during the corporation's fiscal or calendar year; or (2) the corporation has 200 or more separate transactions delivered to customers in this State during the corporation's fiscal or calendar year. Specifically, this bill removes the second criterion related to the number of transactions under both the Sales and Use Tax and the CBT. By eliminating these transactional nexus requirements, the bill provides that: (1) remote sellers would only be required to collect and remit sales tax to the State when the seller's gross revenue from taxable transactions delivered into State exceeds $100,000 in the current or prior calendar year; and (2) corporations would only be subject to CBT when the corporation's receipts from sources within this State exceed $100,000 in the corporation's fiscal or calendar year.

AI Summary

This bill eliminates the transaction-based nexus requirements for both Sales and Use Tax (SUT) and Corporation Business Tax (CBT) in New Jersey, simplifying the criteria for when out-of-state sellers and corporations are required to collect and remit taxes. Under the current law, businesses were subject to these taxes if they either had gross revenue exceeding $100,000 or completed 200 or more separate transactions in the state. The bill removes the 200-transaction threshold, meaning that remote sellers will only be required to collect and remit sales tax when their gross revenue from New Jersey deliveries exceeds $100,000 in the current or prior calendar year, and corporations will only be subject to CBT when their receipts from sources within the state exceed $100,000 in their fiscal or calendar year. This change streamlines the tax nexus requirements, potentially reducing administrative burdens for businesses with a smaller number of transactions in New Jersey while maintaining the revenue threshold as a key determinant for tax obligations. The bill will take effect on the first day of the second month following its enactment.

Committee Categories

Government Affairs

Sponsors (3)

Last Action

Introduced, Referred to Assembly State and Local Government Committee (on 12/12/2024)
(1 Companion Bills)

bill text

bill summary

Loading...

bill summary

Loading...

bill summary

Document Type Source Location
State Bill Page https://www.njleg.state.nj.us/bill-search/2024/A5101
BillText https://pub.njleg.gov/Bills/2024/A5500/5101_I1.HTM
Loading...