New Jersey 2024-2025 Regular Session

New Jersey Assembly Bill A5101

Introduced

12/12/24

Refer

12/12/24

Caption

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

Impact

If enacted, A5101 will specifically transform how sales tax is applied to remote sellers by removing the requirement that they conduct a minimum number of transactions (200) in the state. Under the new framework, only sellers with revenue exceeding $100,000 from sales in New Jersey will be liable for sales tax, simplifying the compliance process for online and remote vendors. Similarly, corporations will now face a tax obligation based solely on revenue thresholds rather than transaction counts, potentially affecting the landscape for businesses operating across state lines.

Summary

Assembly Bill A5101 seeks to amend the current criteria for determining when remote sellers are subject to the Sales and Use Tax Act and the Corporation Business Tax (CBT) in New Jersey. The primary change proposed by this bill is the elimination of the transactional nexus requirement, which previously necessitated that a seller have either substantial sales or a number of transactions before being liable to collect and remit sales tax. By modifying these criteria, A5101 aims to streamline tax obligations for remote sellers and corporations operating within the state.

Contention

The main points of contention revolve around concerns from local legislators and advocacy groups regarding whether this bill unfairly advantages internet and out-of-state sellers at the expense of local businesses. Some critics argue that abolishing the transaction requirement may lead to increased tax burdens on smaller, local businesses while allowing larger corporations to operate with fewer compliance responsibilities. In contrast, supporters assert that the changes will enhance overall economic growth by encouraging more robust participation from remote sellers within New Jersey's marketplace.

Companion Bills

NJ S3604

Same As Eliminates transaction nexus requirement under the Sales and Use Tax and Corporation Business Tax.

Previously Filed As

NJ S3604

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

NJ A2706

Eliminates requirement that taxpayer that qualifies as S corporation for federal tax purposes affirmatively elect New Jersey S corporation status for purposes of corporation business and gross income taxes.