Bill > S1099

Introduced Session

This bill establishes an annual "back-to-school" sales tax holiday in the State of New Jersey during the first full weekend in August. During the three day period from the first Friday through the following Sunday of each year, certain retail sales of school supplies and equipment sold to an individual purchaser for non-business use are exempt from the sales and use tax. Under the bill, tax exempt school supplies and equipment during the holiday include: (1) school supplies, such as pens and pencils, notebooks and binders; (2) school art supplies, such as paints and paintbrushes, clay and glazes; and (3) school instructional materials, such as maps, globes, reference books, and workbooks. For purposes of the bill, tax exempt school supplies and equipment also include: (4) computers, and (5) school computer supplies, such as computer storage equipment, printers, and personal digital assistants, with a sales price of less than $1,000 per item. Retail sales of computers and school computer supplies with a sales price greater than or equal to $1,000 remain subject to tax during the holiday. The establishment of a "back-to-school" sales tax holiday is intended to provide a temporary tax reprieve during the period of time when the State's school aged children, college students, adult learners, and their families prepare to face the challenges of the upcoming school year. Regardless of whether the purchase involves a new book bag for a first time preschooler, husky pencils and construction paper for a grade school student, or a new laptop for a returning college student, the substitute permits consumers to purchase essential school supplies and equipment without the additional expense of the State's sales and use tax. Additionally, the "back-to-school" sales tax holiday is intended to serve as an economic stimulus for the State's retail and small business community. The temporary suspension of the sales and use tax on certain school supplies and equipment each August has the potential to encourage consumer spending when demand is typically soft. Since New York established a sales tax holiday in 1997, many other states have created similar temporary exemption periods of equal or extended duration for similar goods and services. According to the Federation of Tax Administrators, 15 states provided "back-to-school" tax holidays during August of 2009. Barring any delays, repeals, or additions, this bill will make New Jersey the 16th state to provide a tax holiday for back-to-school shoppers.

AI Summary

Committee Categories

Fred Madden (D)*, 

Reviewed by the Sales Tax Review Commission Recommend to not enact (on 03/28/2018)