Division of TaxationWhat is a remote seller?
A remote seller:
Physical presence includes, but is not limited to: having employees, agents, or other representatives working in the State; having an office, warehouse, or other place of business in the State; making a delivery to a location in the State using the seller's own vehicle; and the storage of inventory at a location in the State, regardless of ownership of the facility. For more information, see TB-78(R), Nexus for Sales and Use Tax.
What is the South Dakota v. Wayfair decision?
In South Dakota v. Wayfair (Wayfair), the United State Supreme Court ruled that a state could impose Sales Tax collection and remittance obligations on remote sellers. Prior to Wayfair, states could only impose Sales Tax collection and remittance obligations on sellers that had a physical presence in that state. In response to Wayfair, New Jersey enacted P.L. 2018, c. 132 which imposes Sales Tax collection and remittance requirements on certain remote sellers and marketplace facilitators beginning on November 1, 2018.
How does the law affect a remote seller's transactions prior to November 1, 2018?
The law applies on a prospective basis. Note that sellers that have a physical presence in New Jersey, or that are otherwise legally obligated to collect and remit New Jersey Sales Tax, are still responsible for collecting and remitting Sales Tax on taxable sales made before November 1, 2018.
How does the law affect remote sellers that make retail sales for delivery into New Jersey?
As of November 1, 2018, a remote seller that makes retail sales of tangible personal property, specified digital products, or taxable services that are delivered into New Jersey must register, collect, and remit New Jersey Sales Tax if the remote seller meets either of the following criteria (the economic threshold):
How is the $100,000 gross revenue threshold calculated?
When calculating the $100,000 gross revenue threshold, all sales of tangible personal property, specified digital products, and taxable services delivered into New Jersey are included, including nontaxable retail sales of tangible personal property and specified digital products.
How does the law affect remote sellers that make only sales for resale?
Since the definition of a 'retail sale' in the Sales and Use Tax Act does not include a sale for resale, remote sellers that only make sales for resale, are not required to register with New Jersey.
How does the law affect remote sellers that make only nontaxable retail sales?
Remote sellers that only make nontaxable retail sales are not required to register with New Jersey.
How does a remote seller determine whether it is required to collect tax in 2018?
Once the remote seller exceeds $100,000 in gross revenue from sales of tangible personal property, specified digital products, or taxable services delivered into New Jersey in 2018 or sold tangible personal property, specified digital products, or taxable services delivered into New Jersey in 200 or more separate transactions in 2018, the remote seller is required to collect Sales Tax for the remainder of 2018 and all of 2019.
How does a remote seller that doesn't meet the threshold in 2018 determine whether it is required to collect tax from 2019 forward?
If the remote seller meets the economic threshold in 2019, the remote seller is required to collect Sales Tax for the remainder of 2019 and 2020. If the remote seller does not meet the economic threshold in 2019, the remote seller is not required to collect Sales Tax until the economic threshold is met. Once it is met, the tax collection obligation continues for that year and the next year.
When is a remote seller required to begin collecting Sales Tax?
The remote seller is required to register and begin collecting and remitting Sales Tax on taxable transactions that occur after the economic threshold is met, subject to the grace period described below. The remote seller is not responsible for collecting and remitting Sales Tax on transactions that occurred prior to meeting the threshold.
Once the economic threshold is met, is there a grace period before the registration, collection, and remittance obligations begin?
Yes. The Division is allowing a remote seller a grace period up to 30 calendar days to register with New Jersey and begin collecting and remitting Sales Tax.
Is a remote seller required to collect Sales Tax on the transaction that causes the remote seller to meet the economic threshold?
No. A remote seller is not required to collect Sales Tax on the transaction that causes the remote seller to meet the economic threshold. Once the economic threshold is met a remote seller is required to register with New Jersey and begin collecting and remitting Sales Tax, subject to the grace period described above.
Example:
Remote Seller has gross revenue of $90,000 generated from sales of tangible personal property delivered into New Jersey. Remote Seller then makes one sale in the amount of $25,000 from the sale of tangible personal property delivered into New Jersey. As a result of this sale, Remote Seller's gross revenue from sales of tangible personal property delivered into New Jersey is $115,000.
Remote Seller is not required to collect and remit Sales Tax on this transaction, which causes its gross revenue to exceed the economic threshold. However, because Remote Seller met the economic threshold, Remote Seller is required to register with New Jersey and must begin collecting and remitting Sales Tax, subject to the grace period described above.
Is a remote seller required to collect and remit Sales Tax on transactions that occur through a marketplace?
Remote sellers are not required to collect and remit Sales Tax on the sale of tangible personal property, specified digital products, or taxable services delivered into New Jersey when sold through a marketplace, because the law requires the marketplace facilitator to collect and remit Sales Tax on all marketplace transactions. The marketplace facilitator is required to collect and remit tax, regardless of whether the remote seller is above or below the economic threshold. For additional information on Sales Though a Marketplace, see Technical Bulletin 83.
Is a remote seller required to register with New Jersey if all of the remote seller's sales to New Jersey customers occur through a marketplace?
A remote seller that is over the economic threshold, but sells solely through one or more marketplaces must register, but may request to be placed on a non-reporting basis for Sales Tax by completing Form C-6205-ST, since the marketplace facilitator is required to collect the tax on all marketplace transactions. A remote seller that is under the economic threshold is not required to register.
By registering through the SSTRS, a seller also has the option of contracting with a certified service provider (CSP). A CSP files Sales Tax returns and remits Sales Tax on the seller's behalf. For more information, see CSP and Other Providers.
What sales are subject to Sales Tax?
The Division has various tax publications on their website that identify the taxability of tangible personal property, specified digital products, and services. For example, see S&U-4, New Jersey Sales Tax Guide.
How does the law affect purchasers located in New Jersey?
Purchasers in New Jersey may see an increase in the number of remote sellers that collect New Jersey Sales Tax on sales of tangible personal property, specified digital products, or taxable services which are delivered into New Jersey. If a seller does not collect Sales Tax on a taxable sale delivered to New Jersey, the purchaser must continue to report and remit Use Tax. For more information, see ANJ-7, Use Tax in New Jersey.
How does the law affect New Jersey's “Click-Through Nexus” law?
The “Click-Through Nexus” provisions set forth under N.J.S.A. 54:32B-2(i)(1) are unaffected by the law. For more information, see TB-76, Presumption of Soliciting Business in New Jersey by Out-of-State Seller.
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