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New rules have been adopted for New Jersey’s tax amnesty program. The amnesty program will begin May 4, 2009 and end June 15, 2009. The amnesty will apply for all taxes administered and collected by the Division of Taxation for returns due on or after January 1, 2002 and prior to February 1, 2009. Eligible taxpayers will have to pay the amount of tax owed and one-half of the balance of interest that is due as of May 1, 2009, without and penalties or referral recovery fees. Any taxpayer under criminal investigation or charge for a state tax matter, as certified by a county prosecutor or by the Attorney General, will not be eligible for the Amnesty. If an eligible taxpayer fails to pay the tax during the amnesty period, an additional 5% penalty will be imposed. This penalty will not be waived or abated and is in addition to any other penalties, interest, or other collection costs as authorized by law. (N.J.A.C. 18:39-1.1 ~1.8, New Jersey Division of taxation, effective March 26, 2009)


Legislation has been passed that requires the Director of the Division of Taxation to establish a 45 day state tax amnesty period, ending no later than June 15, 2009. The amnesty program will begin on May 4, 2009 and end on June 15, 2009 and will apply to state tax liabilities that were due on and after January 1, 2002 (the day after the state’s last amnesty period) and before February 1, 2009. Delinquent taxpayers may pay the state tax owed and one-half of the balance of interest due as of May 1, 2009. Recovery fees, civil penalties, and criminal penalties will be waived. Failure to pay tax liabilities during the period will result in a five percent penalty in addition to all other penalties, interest, or collection costs (A.B. 3819, Laws 2009, effective March 17, 2009)


New Jersey has enacted legislation that revises the New Jersey Sales and Use Tax Act to conform with various provisions of the Streamlined Sales and Use Tax (SST) Agreement, effective January 1, 2009. Among the significant changes is a new definition of “fur clothing” and an exclusion of fur clothing from the clothing exemption. In addition, the law repeals the 6% fur clothing gross receipts tax; therefore, making fur clothing subject to the sales and use tax rate of 7%. The law also adds a revised definition of “telecommunication service” and replaces other current telecommunications definitions with the terms provided under the SST Agreement. Furthermore, the bill replaces the term “direct mail” with the term “printed advertising material.” The definitions of “sales price” and “delivery charges” have been updated and clarified. Other topics have been updated as well, including but not limited to 1) food, 2) research and development, 3) recordkeeping, 4) mobility enhancing equipment, 5) relief from tax liability, and 6) multiple points of use (MPU). For further detail please refer to Notice – Amendments to Sales and Use Tax Act. (Notice – Amendments to Sales and Use Tax Act, New Jersey Division of Taxation, January 5, 2009)


With fuel surcharges becoming more common, New Jersey has issued a notice concerning their application of sales tax. Retail sales of motor fuels are not subject to sales tax. The definition of “sales price” set forth in N.J.S.A. 54:32B-2(oo)(1) includes “The cost of materials used, labor or service cost, interest, losses, all costs of transportation to the seller, all taxes imposed on the seller, and any other expense of the seller;...” Therefore, when this expense is passed along to the customer as a result of performing a service or selling a product, it should be included in the sale price. The taxability of the fuel surcharge will follow the taxability of the service or product being sold regardless of whether the surcharge is separately stated. (Notice, New Jersey Division of Taxation, August 7, 2008)


The New Jersey Tax Court recently debated whether a claim made pursuant to the New Jersey Consumer Fraud Act may be maintained against a vendor who is alleged to have collected more sales tax than is required by the Sales and Use Tax Act. Specifically, a class action alleged that the plaintiff made several purchases from the defendants’ supermarkets from 2002 to 2005, and that the defendants overcharged sales tax that was due on the purchases. The overcharges are said to have resulted from the defendants’ computation of sales tax based on the regular price of the items purchased rather than on the reduced or discounted sales prices actually charged for the items, particularly in transactions where the plaintiff used store coupons or used a shopper’s club card issued by the supermarket. The alleged violations were dismissed because, once the money collected was remitted to the state, the sole remedy available to the taxpayers was a refund claim made to the Division of Taxation. (Kawa v. Wakefern Food Corporation, New Jersey Tax Court, No. 008717-2006, April 3, 2008)



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