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54:32B-3. Imposition of sales tax.
3. There is imposed and there shall be paid a tax of 6% upon:
(a) The receipts from every retail sale of tangible personal property, except as otherwise provided in this act.
(b) The receipts from every sale, except for resale, of the following services:
(1) Producing, fabricating, processing, printing or imprinting tangible personal property, performed for a person who directly or indirectly furnishes the tangible personal property, not purchased by him for resale, upon which such services are performed.
(2) Installing tangible personal property, or maintaining, servicing, repairing tangible personal property not held for sale in the regular course of business, whether or not the services are performed directly or by means of coin-operated equipment or by any other means, and whether or not any tangible personal property is transferred in conjunction therewith, except (i) such services rendered by an individual who is engaged directly by a private homeowner or lessee in or about his residence and who is not in a regular trade or business offering his services to the public, (ii) such services rendered with respect to personal property exempt from taxation hereunder pursuant to section 13 of P.L.1980, c.105 (C.54:32B-8.1), (iii) (Deleted by amendment, P.L.1990, c.40), (iv) any receipts from laundering, dry cleaning, tailoring, weaving, pressing, shoe repairing and shoeshining and (v) services rendered in installing property which, when installed, will constitute an addition or capital improvement to real property, property or land.
(3) Storing all tangible personal property not held for sale in the regular course of business and the rental of safe deposit boxes or similar space.
(4) Maintaining, servicing or repairing real property, other than a residential heating system unit serving not more than three families living independently of each other and doing their cooking on the premises, whether the services are performed in or outside of a building, as distinguished from adding to or improving such real property by a capital improvement, but excluding services rendered by an individual who is not in a regular trade or business offering his services to the public, and excluding garbage removal and sewer services performed on a regular contractual basis for a term not less than 30 days.
(5) Direct-mail processing services, except for direct-mail processing services in connection with distribution of direct mail to out-of-State recipients.
(6) (Deleted by amendment, P.L.1995, c.184).
(7) Utility service provided to persons in this State, any right or power over which is exercised in this State.
Wages, salaries and other compensation paid by an employer to an employee for performing as an employee the services described in this subsection are not receipts subject to the taxes imposed under this subsection (b).
Services otherwise taxable under paragraph (1) or (2) of this subsection (b) are not subject to the taxes imposed under this subsection, where the tangible personal property upon which the services were performed is delivered to the purchaser outside this State for use outside this State.
(c) (1) Receipts from the sale of prepared food in or by restaurants, taverns, or other establishments in this State, or by caterers, including in the amount of such receipts any cover, minimum, entertainment or other charge made to patrons or customers, except for meals especially prepared for and delivered to homebound elderly, age 60 or older, and to disabled persons, or meals prepared and served at a group-sitting at a location outside of the home to otherwise homebound elderly persons, age 60 or older, and otherwise homebound disabled persons, as all or part of any food service project funded in whole or in part by government or as part of a private, nonprofit food service project available to all such elderly or disabled persons residing within an area of service designated by the private nonprofit organization; and
(2) Receipts from sales of food and beverages sold through vending machines, at the wholesale price of such sale, which shall be defined as 70% of the retail vending machine selling price, except sales of milk, which shall not be taxed. Nothing herein contained shall affect other sales through coin-operated vending machines taxable pursuant to subsection (a) above or the exemption thereto provided by section 21 of P.L.1980, c.105 (C.54:32B-8.9).
The tax imposed by this subsection (c) shall not apply to food or drink which is sold to an airline for consumption while in flight.
(3) For the purposes of this subsection:
~Food and beverages sold through vending machines~ means food and beverages dispensed from a machine or other mechanical device that accepts payment; and
~Prepared food~ means:
A. food sold in a heated state or heated by the seller; or
B. two or more food ingredients mixed or combined by the seller for sale as a single item, but not including food that is only cut, repackaged, or pasteurized by the seller, and eggs, fish, meat, poultry, and foods containing these raw animal foods requiring cooking by the consumer as recommended by the Food and Drug Administration in Chapter 3, part 401.11 of its Food Code so as to prevent food borne illnesses; or
C. food sold with eating utensils provided by the seller, including plates, knives, forks, spoons, glasses, cups, napkins, or straws. A plate does not include a container or packaging used to transport the food;
provided however, that ~prepared food~ does not include the following sold without eating utensils:
A. food sold by a seller whose proper primary NAICS classification is manufacturing in section 311, except subsector 3118 (bakeries);
B. food sold in an unheated state by weight or volume as a single item; or
C. bakery items, including bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, and tortillas.
(d) The rent for every occupancy of a room or rooms in a hotel in this State, except that the tax shall not be imposed upon a permanent resident.
(e) (1) Any admission charge to or for the use of any place of amusement in the State, including charges for admission to race tracks, baseball, football, basketball or exhibitions, dramatic or musical arts performances, motion picture theaters, except charges for admission to boxing, wrestling, kick boxing or combative sports exhibitions, events, performances or contests which charges are taxed under any other law of this State or under section 20 of P.L.1985, c.83 (C.5:2A-20), and, except charges to a patron for admission to, or use of, facilities for sporting activities in which such patron is to be a participant, such as bowling alleys and swimming pools. For any person having the permanent use or possession of a box or seat or lease or a license, other than a season ticket, for the use of a box or seat at a place of amusement, the tax shall be upon the amount for which a similar box or seat is sold for each performance or exhibition at which the box or seat is used or reserved by the holder, licensee or lessee, and shall be paid by the holder, licensee or lessee.
(2) The amount paid as charge of a roof garden, cabaret or other similar place in this State, to the extent that a tax upon such charges has not been paid pursuant to subsection (c) hereof.
(f) (1) The receipts from every sale, except for resale, of intrastate or interstate telecommunications sourced to this State in accordance with section 29 of P.L.2005, c.126 (C.54:32B-3.4).
(2) The receipts from every sale, except for resale, of intrastate or interstate mobile telecommunications services billed by or for a customer@s home service provider and provided to a customer with a place of primary use in this State. The provisions and definitions of the federal ~Mobile Telecommunications Sourcing Act,~ 4 U.S.C. ss. 116-126 (Pub.L. 106-252), are applicable herein.
(g) The receipts from every sale, except for resale, of prepaid calling service and the recharge of prepaid calling service.
L.1966,c.30,s.3; amended 1966, c.53, s.1; 1966, c.132, s.1; 1967, c.25, s.1; 1970, c.7, s.1; 1974, c.170; 1977, c.54; 1977, c.252; 1979, c.86, s.23; 1979, c.170; 1979, c.274; 1980, c.61, s.2; 1980, c.105, s.12; 1980, c.107, s.1; 1982, c.227, s.1; 1987, c.268, s.1; 1989, c.123, s.2; 1990, c.40, s.2; 1992, c.11, s.1; 1995, c.184, s.2; 1997, c.162, s.18; 1998, c.99, s.2; 1999, c.248, s.2; 2002, c.45, s.2; 2005, c.126, s.2.
54:32B-3.1 Sourcing of retail sale of product; definitions.
26. a. The retail sale, excluding lease or rental, of a product shall be sourced as follows:
(1) If the product is received by the purchaser at a business location of the seller, then the sale shall be sourced to that business location.
(2) If the product is not received by the purchaser at a business location of the seller, then the sale shall be sourced to the location where receipt by the purchaser (or the purchaser@s donee, designated as such by the purchaser) occurs, including the location indicated by instructions for delivery to the purchaser (or donee), known to the seller.
(3) If paragraphs (1) and (2) of this subsection do not apply, then the sale shall be sourced to the location indicated by an address for the purchaser that is available from the business records of the seller that are maintained in the ordinary course of the seller@s business when use of this address does not constitute bad faith.
(4) If paragraphs (1), (2), and (3) of this subsection do not apply, then the sale shall be sourced to the location indicated by an address for the purchaser obtained during the consummation of the sale, including the address of a purchaser@s payment instrument, if no other address is available, if use of this address does not constitute bad faith.
(5) If the rules of paragraph (1), (2), (3), or (4) of this subsection do not apply, including the circumstance in which the seller is without sufficient information to apply the previous rules, then the location shall be determined by the address from which tangible personal property was shipped, from which the digital good or the computer software delivered electronically was first available for transmission by the seller, or from which the service was provided (disregarding for these purposes any location that merely provided the digital transfer of the product sold).
b. The lease or rental of tangible personal property, other than property identified in subsection c. or subsection d. of this section, shall be sourced as follows:
(1) If a lease or rental that requires recurring periodic payments, then the first periodic payment shall be sourced the same as a retail sale in accordance with the provisions of subsection a. of this section. Periodic payments made subsequent to the first payment shall be sourced to the primary property location for each period covered by the payment. The primary property location shall be as indicated by an address for the property provided by the lessee that is available to the lessor from its records maintained in the ordinary course of business, when use of this address does not constitute bad faith. The property location shall not be altered by intermittent use at different locations, such as use of business property that accompanies employees on business trips and service calls.
(2) If a lease or rental does not require recurring periodic payments, then the payment shall be sourced the same as a retail sale in accordance with the provisions of subsection a. of this section.
(3) This subsection shall not affect the imposition or computation of sales or use tax on leases or rentals based on a lump sum or accelerated basis, or on the acquisition of property for lease.
c. The lease or rental of motor vehicles, trailers, semi-trailers, or aircraft that do not qualify as transportation equipment, as defined in subsection d. of this section, shall be sourced as follows:
(1) If a lease or rental requires recurring periodic payments, then each periodic payment shall be sourced to the primary property location. The primary property location shall be as indicated by an address for the property provided by the lessee that is available to the lessor from its records maintained in the ordinary course of business, if use of this address does not constitute bad faith. This location shall not be altered by intermittent use at different locations.
(2) If a lease or rental does not require recurring periodic payments, then the payment shall be sourced the same as a retail sale in accordance with the provisions of subsection a. of this section.
(3) This subsection shall not affect the imposition or computation of sales or use tax on leases or rentals based on a lump sum or accelerated basis, or on the acquisition of property for lease.
d. The retail sale, including lease or rental, of transportation equipment shall be sourced the same as a retail sale in accordance with the provisions of subsection a. of this section, notwithstanding the exclusion of lease or rental under subsection a. of this section.
e. For the purposes of this section,
~Transportation equipment~ means:
(1) Locomotives and railcars that are utilized for the carriage of persons or property in interstate commerce;
(2) Trucks and truck-tractors with a Gross Vehicle Weight Rating (GVWR) of 10,001 pounds or greater, trailers, semi-trailers, or passenger buses that are:
A. Registered through the International Registration Plan; and
B. Operated under authority of a carrier authorized and certificated by the U.S. Department of Transportation or another federal authority to engage in the carriage of persons or property in interstate commerce;
(3) Aircraft that are operated by air carriers authorized and certificated by the U.S. Department of Transportation or another federal or a foreign authority to engage in the carriage of persons or property in interstate or foreign commerce; or
(4) Containers designed for use on and component parts attached or secured on the items set forth in subsections (d)(1) through (d)(3); and
~Receive~ and ~receipt~ mean:
(1) Taking possession of tangible personal property,
(2). Making first use of services, or
(3) Taking possession or making first use of digital goods, whichever comes first.
The terms ~receive~ and ~receipt~ do not include possession by a shipping company on behalf of the purchaser.
L.2005,c.126,s.26.
54:32B-3.2 Multiple points of use exemption form, circumstances when applicable.
27. a. Notwithstanding the general sourcing provisions of section 26 of P.L.2005, c.126 (C.54:32B-3.1), a business purchaser that is not a holder of a direct pay permit that knows at the time of its purchase of a digital good, computer software delivered electronically, or a service that the digital good, computer software delivered electronically, or service will be concurrently available for use in more than one jurisdiction shall deliver to the seller in conjunction with its purchase a multiple points of use exemption form (~MPU exemption form~) disclosing this fact.
b. Upon receipt of the MPU exemption form, the seller shall be relieved of all obligation to collect, pay, or remit the applicable tax and the purchaser shall be obligated to collect, pay, or remit the applicable tax on a direct pay basis.
c. A purchaser delivering the MPU exemption form may use any reasonable, but consistent and uniform, method of apportionment that is supported by the purchaser@s business records as they exist at the time of the consummation of the sale.
d. The MPU exemption form shall remain in effect for all future sales by the seller to the purchaser (except as to the subsequent sale@s specific apportionment that is governed by the principle of subsection c. of this section and the facts existing at the time of the sale) until it is revoked in writing.
e. A holder of a direct pay permit shall not be required to deliver a MPU exemption form to the seller. A direct pay permit holder shall follow the provisions of subsection c. of this section in apportioning the tax due on a digital good or a service that will be concurrently available for use in more than one jurisdiction.
L.2005,c.126,s.27.
54:32B-3.3 Direct mail form, information to seller.
28. a. Notwithstanding the general sourcing provisions of section 26 of P.L.2005, c.126 (C.54:32B-3.1), a purchaser of direct mail that is not a holder of a direct pay permit shall provide to the seller in conjunction with the purchase either a direct mail form or information to show the jurisdictions to which the direct mail is delivered to recipients.
(1) Upon receipt of the direct mail form, the seller shall be relieved of all obligations to collect, pay, or remit the applicable tax and the purchaser shall be obligated to pay or remit the applicable tax on a direct pay basis. A direct mail form shall remain in effect for all future sales of direct mail by the seller to the purchaser until it is revoked in writing.
(2) Upon receipt of information from the purchaser showing the jurisdictions to which the direct mail is delivered to recipients, the seller shall collect the tax according to the delivery information provided by the purchaser. In the absence of bad faith, the seller shall be relieved of any further obligation to collect tax on any transaction for which the seller has collected tax pursuant to the delivery information provided by the purchaser.
b. If the purchaser of direct mail does not have a direct pay permit and does not provide the seller with either a direct mail form or delivery information, as required by subsection a. of this section, the seller shall collect the tax according to paragraph (5) of subsection a. of section 26 of P.L.2005, c.126 (C.54:32B-3.1). Nothing in this subsection shall limit a purchaser@s obligation for sales or use tax to any state to which the direct mail is delivered.
c. If a purchaser of direct mail provides the seller with documentation of direct pay authority, the purchaser shall not be required to provide a direct mail form or delivery information to the seller.
L.2005,c.126,s.28.
54:32B-3.4 Sourcing of certain telecommunication services; definitions.
29. a. Notwithstanding the general sourcing provisions of section 26 of P.L.2005, c.126 (C.54:32B-3.1), except for the telecommunication services enumerated in subsection c. of this section, the sale of telecommunication service sold on a call-by-call basis shall be sourced to:
(1) each level of taxing jurisdiction where the call originates and terminates in that jurisdiction; or
(2) each level of taxing jurisdiction where the call either originates or terminates and in which the service address is also located.
b. Except for the telecommunication services enumerated in subsection c. of this section, a sale of telecommunications services sold on a basis other than a call-by-call basis shall be sourced to the customer@s place of primary use.
c. The sale of the following telecommunication services shall be sourced to each level of taxing jurisdiction as follows:
(1) A sale of mobile telecommunications services other than air-to-ground radiotelephone service and prepaid calling service shall be sourced to the customer@s place of primary use as required by the federal ~Mobile Telecommunications Sourcing Act,~ 4 U.S.C. s.116 et seq.
(2) A sale of post-paid calling service shall be sourced to the origination point of the telecommunications signal as first identified by either:
(a) the seller@s telecommunications system; or
(b) information received by the seller from its service provider, if the system used to transport such signals is not that of the seller.
(3) A sale of prepaid calling service shall be sourced in accordance with the general sourcing provisions of section 26 of P.L.2005, c.126 (C.54:32B-3.1); provided however, that in the case of a sale of mobile telecommunications service that is a prepaid telecommunications service, the rule provided in paragraph (5) of subsection (a) of that section shall include as an option the location associated with the mobile telephone number.
(4) A sale of a private communication service shall be sourced as follows:
(a) Service for a separate charge related to a customer channel termination point shall be sourced to each level of jurisdiction in which such customer channel termination point is located.
(b) Service for which all customer termination points are located entirely within one jurisdiction or levels of jurisdiction shall be sourced to such jurisdiction in which the customer channel termination points are located.
(c) Service for segments of a channel between two customer channel termination points located in different jurisdictions and which segments of channel are separately charged shall be sourced fifty percent to each level of jurisdiction in which the customer channel termination points are located.
(d) Service for segments of a channel located in more than one jurisdiction or levels of jurisdiction and which segments of channel are not separately billed shall be sourced to each jurisdiction based on the percentage determined by dividing the number of customer channel termination points in such jurisdiction by the total number of customer channel termination points.
d. For the purposes of this section:
~Air-to-ground radiotelephone service~ means a radio service, as that term is defined in 47 CFR 22.99, in which common carriers are authorized to offer and provide radio telecommunications service for hire to subscribers in aircraft;
~Call-by-call basis~ means any method of charging for telecommunications services in which the price is measured by individual calls;
~Communications channel~ means a physical or virtual path of communications over which signals are transmitted between or among customer channel termination points;
~Customer~ means the person or entity that contracts with the seller of telecommunications services. If the end user of telecommunications services is not the contracting party, then the end user of the telecommunications service is the customer of the telecommunication service, but this provision applies only for the purpose of sourcing sales of telecommunications services under this section. ~Customer~ does not include a reseller of telecommunications service or for mobile telecommunications service of a serving carrier under an agreement to serve the customer outside the home service provider@s licensed service area;
~Customer channel termination point~ means the location where the customer either inputs or receives the communications;
~End user~ means the person who utilizes the telecommunication service. In the case of an entity, ~end user~ means the individual who utilizes the service on behalf of the entity;
~Home service provider~ has the same meaning as that term is defined by the federal ~Mobile Telecommunications Sourcing Act,~ 4 U.S.C. s.124;
~Mobile telecommunications service~has the same meaning as that term is defined by the federal ~Mobile Telecommunications Sourcing Act,~ 4 U.S.C. s.124;
~Place of primary use~ means the street address representative of where the customer@s use of the telecommunications service primarily occurs, which shall be the residential street address or the primary business street address of the customer. In the case of mobile telecommunications services, ~place of primary use~ shall be within the licensed service area of the home service provider;
~Post-paid calling service~ means the telecommunications service obtained by making a payment on a call-by-call basis either through the use of a credit card or payment mechanism such as a bank card, travel card, credit card, or debit card, or by charge made to a telephone number which is not associated with the origination or termination of the telecommunications service. A post-paid calling service includes a telecommunications service that would be a prepaid calling service except it is not exclusively a telecommunications service;
~Prepaid calling service~ means the right to access exclusively telecommunications services, which shall be paid for in advance that enables the origination of calls using an access number or authorization code, whether manually or electronically dialed, and that is sold in predetermined units or dollars of which the number declines with use in a known amount;
~Private communication service~ means a telecommunication service that entitles the customer to exclusive or priority use of a communications channel or group of channels between or among termination points, regardless of the manner in which such channel or channels are connected, and includes switching capacity, extension lines, stations, and any other associated services that are provided in connection with the use of such channel or channels; and
~Service address~ means
(1) The location of the telecommunications equipment to which a customer@s call is charged and from which the call originates or terminates, regardless of where the call is billed or paid;
(2) If the location in paragraph (1) of this definition is not known, ~service address~ means the origination point of the signal of the telecommunications services first identified by either the seller@s telecommunications system or in information received by the seller from its service provider, in the case that the system used to transport such signals is not that of the seller; or
(3) If the locations in paragraphs (1) and (2) of this definition are not known, ~service address~ means the location of the customer@s place of primary use.
L.2005,c.126,s.29.
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