Sponsored by:
Assemblyman P. CHRISTOPHER TULLY
District 38 (Bergen and Passaic)
Assemblyman JOHN ARMATO
District 2 (Atlantic)
Assemblyman ANDREW ZWICKER
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
Co-Sponsored by:
Assemblywoman Swain, Assemblyman Johnson, Assemblywomen Lopez, Mosquera, Assemblyman Mukherji, Assemblywoman Vainieri Huttle, Assemblymen Houghtaling and Freiman
SYNOPSIS
Provides temporary exemption under sales and use tax for winterizing certain small business operations.
CURRENT VERSION OF TEXT
As introduced.
An Act providing a temporary exemption under the sales and use tax for winterizing certain small business operations.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. Receipts from sales of materials, supplies, or services made to a small business for exclusive use in winterizing the small business, including improving, altering, or repairing real property of the small business, shall be exempt from the tax imposed pursuant to the “Sales and Use Tax Act,” P.L.1966, c.30 (C.54:32B-1 et seq.), for the duration of the exemption period.
b. In order to claim the exemption provided pursuant to this section, a small business shall file an exemption application with the Director of the Division of Taxation in the Department of the Treasury within 30 days of the conclusion of the exemption period. A small business shall only be allowed to file one exemption application with the director.
c. The exemption application shall include a list of purchases made by or services rendered to the small business that qualify for the exemption, the price of each item listed on the application, the date each purchase was made or service was rendered, and a declaration by the small business that the items listed for which an exemption was applied were exclusively used in winterizing the small business for outdoor operations. The director may require a small business to submit such documentation, records, receipts, or other information as deemed necessary to verify that the small business applying for the exemption meets the criteria set forth to claim the exemption and is a small business.
d. If a small business willfully and knowingly falsifies any document, record, receipt, or other information required by the director to claim the exemption provided pursuant to this section, that small business shall be subject to a penalty of $100 for a first offense and $200 for each subsequent offense thereafter.
e. If the director determines that a small business is entitled to an exemption after successfully submitting an exemption application, the small business shall be entitled to a refund equal to the amount of sales tax paid for each item purchased or service rendered that qualifies pursuant to this section. The refund shall be paid to the small business within 45 days of the submission of an exemption application.
f. As used in this section:
“Exemption period” means the period of time starting on September 1, 2020 and ending on March 31, 2021.
“Small business” means any business that is independently owned and operated and employs fewer than 20 full-time employees.
“Winterizing the small business” means any items purchased or services rendered to a small business for the exclusive use or purpose of conducting normal customer-facing operations, which are customarily provided indoors, outdoors during the fall and winter seasons due to the COVID-19 pandemic, including, but not limited to, the purchase of products to melt or remove snow and ice, tents, and space heaters.
2. This act shall take effect immediately.
STATEMENT
This bill provides a temporary sales and use tax exemption to small businesses that winterize their businesses during a specified exemption period.
The bill allows any business that is independently owned and operated and employs fewer than 20 full-time employees to submit an exemption application to the Director of the Division of Taxation in the Department of the Treasury for certain purchases made or services rendered to winterize their business. Those purchases or services would have to made or rendered starting on September 1, 2020 and ending on March 31, 2021. The exemption only applies to items purchased or services rendered to a small business for the exclusive use or purpose of conducting normal customer-facing operations, which are customarily provided indoors, outdoors during the fall and winter seasons due to the COVID-19 pandemic, including, but not limited to, the purchase of products to melt or remove snow and ice, tents, and space heaters.
A small business has to submit an exemption application detailing the purchases or services, including when they occurred and the cost of the listed items. If the director determines that the small business meets the criteria set forth in the bill for the exemption, the small business is entitled to a refund equal to the amount of sales tax paid for each item purchased or service rendered that qualifies. The sponsor’s intent is to provide targeted relief to small businesses that will incur costs for having to expand outdoor operations during the fall and winter seasons due to the COVID-19 pandemic.