New Jersey Wayfair Sales Tax Law Now Effective November 1

Enacted legislation codifies that remote sellers meeting an economic threshold are required to register, collect, and remit New Jersey sales tax. Previously, the Division of Taxation adopted this economic nexus standard, effective October 1, 2018. (TAXDAY, 2018/08/15, S. 14) However, the legislation changes the effective date to November 1, 2018.

Also effective November 1, 2018, the legislation:

– imposes sales tax collection requirements on marketplace facilitators; and

– clarifies that travel agencies are not required to collect sales tax or various hotel taxes.

Sales/Economic Thresholds

Sales tax collection will be required in New Jersey if, during the current or prior calendar year, a seller that does not have a physical presence either:

– exceeds $100,000 in gross revenue from sales in New Jersey; or

– makes 200 or more separate transactions in New Jersey.

Additional information is available on the division’s website at https://www.state.nj.us/treasury/taxation/remotesellers.shtml.

Marketplace Facilitators

Marketplace facilitators are required to collect sales tax on sales they facilitate for marketplace sellers. However, in order to ensure the accurate and timely collection of taxes due, the division has the ability to temporarily suspend or delay the collection requirements of a marketplace facilitator. The delay can be for a period of up to 180 days.

Following each retail sale made, the marketplace facilitator must provide to the purchaser a sales slip, invoice, receipt, or other statement or memorandum of the price paid or payable, which must state, charge, and show the tax separately.

Travel Agencies

The legislation clarifies that travel agencies and online travel agencies are not considered “transient space marketplaces”. This clarification is intended to ensure that travel agencies and online travel agencies are not required to collect and pay sales tax or various hotel taxes for sales on their platforms.

A.B. 4496, Laws 2018, effective November 1, 2018

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CCHTaxGroup

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