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On Thursday, September 27, 2018, both houses of the Legislature approved legislation that makes a number of changes to the tax structure in New Jersey. I have included links to the bills, as well as links to our testimony and press release.
The bill A-4495 / S-2989 Pintor Marin (D29); Sarlo (D36); Singleton (D7) makes a number of changes regarding the tax base, as well as date changes as they relate to the CBT and combined reporting. Additionally, the bill provides guidance on global intangible low-taxed income (GILTI) and clarifies the treatment of NJ Economic Development Authority (EDA) tax credits. The bill was approved by a vote of 41-37 in the Assembly, and 21-15 in the Senate. The legislation now heads to Governor Murphy for his consideration.
NJBIA opposed the bill, as we are concerned about the financial burden it will place on the state’s largest job creators, and the impact it will have on those companies in the innovation economy. These impacts come as a result of the bill’s treatment of global intangible low-taxed income (GILTI), net operating losses, repatriation and state minimum taxes related to combined reporting.
For a copy of NJBIA’s press release opposing the legislation and encouraging the Governor to veto the legislation please click here. For a copy of the letter we sent to the Legislature indicating our opposition to the bill, please click here. NJBIA will continue to oppose this legislation.
Please click here to read an additional CBT article from ROI.
Remote Sellers and Marketplace Facilitators Sales Tax Legislation
The Legislature also approved A-4496 / S-2990 (Burzichelli (D3); Moriarty (D4); Singleton (D7)), which imposes the collection of sales tax requirements on marketplace facilitators and certain sellers who do not have a physical presence in the State. The bill was approved in the Assembly by a vote of 43-35, and in the Senate by a vote of 23-14.
The bill sets a threshold that if a seller does not have a physical presence in the State, they must collect sales tax if they have over $100,000 in revenue from sales into the state, or 200 or more separate transactions into the state, both of which are applicable to the calendar year, or prior year. The bill also clarifies that travel agencies and online travel agencies are not transient space marketplaces.
As you will remember, after the U.S. Supreme Court ruling in South Dakota v. Wayfair, Inc., the Legislature introduced and passed legislation that provided for the collection of sales tax from certain remote sellers. Governor Murphy issued a conditional veto of this legislation (A-4261/S-2794) in August. The Governor recommended a number of changes to assist the Division of Taxation in the administration of the new law’s requirements, which are included in the bill approved on Thursday.