Senator ANTHONY M. BUCCO
District 25 (Morris and Somerset)
Establishes sales tax credit and sales tax holiday for portion of state of emergency related to COVID-19 pandemic.
CURRENT VERSION OF TEXT
An Act establishing a sales tax credit and sales tax holiday for a portion of the state of emergency related to the COVID-19 pandemic.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A seller that is a small business shall be entitled to claim a refundable credit against remittances of sales and use tax equal to the seller’s total quarterly remittance for the credit period less the amount of remittance dedicated pursuant to subparagraph (b) of Article VIII, Section I, paragraph 7 of the New Jersey Constitution. The credit shall be claimed by the seller at such time a return is filed and payment is made to the director pursuant to sections 17 and 18 of P.L.1966, c.30 (C.54:32B-17 and C.54:32B-18). If a seller has made monthly or quarterly payments or has filed a quarterly return for the credit period, the seller shall receive a refund equal to the amount of the credit specified in this section by filing an amended return with the director or an application on forms prescribed by the director.
b. The director may require a seller to submit such documentation, records, and other information as the director deems necessary to verify that the seller claiming the credit provided in subsection a. of this section meets the criteria set forth in this section to be deemed a small business.
c. If a seller willfully and knowingly falsifies any document, record, or other information required by the director to claim the credit provided in subsection a. of this section, that seller shall be subject to a penalty of $2,500 for a first offense and $5,000 for each subsequent offense thereafter.
d. Notwithstanding any other law to the contrary, receipts from every sale or service provided by a small business that is taxable pursuant to the "Sales and Use Tax Act, " P.L.1966, c.30 (C.54:32B-1 et seq.) are exempt from the tax for the duration of the exclusion period.
e. As used in this section:
“Credit period” means the first calendar quarter of Calendar Year 2020.
"Exclusion period" means the period of time following the Governor’s public declaration of a state of emergency pursuant to Executive Order No. 103 of 2020 until it is determined by the Governor that an emergency no longer exists.
"Small business" means any business that is independently owned and operated and employs fewer than 100 employees.
2. This act shall take effect immediately, provided, however, that subsection d. of section 1 shall apply to retail sales made on or after the seventh day following enactment.
This bill establishes a sales tax credit against small businesses’ sales tax collections and a sales tax holiday for small businesses for a portion of the Governor's declaration of a state of emergency related to the COVID-19 pandemic. A “small business” is defined as any business that is independently owned and operated and employs fewer than 100 employees.
The sales tax credit is equal to a small business’s quarterly remittance for the first calendar quarter of Calendar Year 2020 less the amount of remittance dedicated for property tax reform pursuant to the New Jersey Constitution. If a small business has made monthly or quarterly payments or filed its quarterly return for the calendar quarter, the small business would receive a refund from the State equal to the credit amount.
The sales tax holiday will last until the Governor determines that an emergency no longer exists as stipulated under Executive Order No. 103 of 2020.
On March 9, 2020, the Governor declared a state of emergency due to the COVID-19 pandemic, also referred to as the coronavirus pandemic. Because of the coronavirus pandemic, employers have had to cut staff hours, schools have closed, and residents are at risk of not being able to pay rent and other expenses. The bill allows residents to keep more of their income while incentivizing sales at small businesses that will experience financial hardships. The bill also provides small businesses with an infusion of cash by letting them keep sales tax collections.