ASSEMBLY, No. 1137

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Assemblywoman MURPHY and Assemblyman DeCROCE

An Act concerning the measure of tax on sales of certain local interest calendars under the sales and use tax, supplementing P.L.1966, c.30 (C.54:32B-1 et seq.).

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. a. For the purposes of the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), the term retail sale does not include the transfer of a local interest calendar to its final possessor free of charge or at nominal consideration. The transfer of a local interest calendar from its printer to its publisher or other distributor for transfer to its final possessor free of charge or at nominal consideration is not a sale for resale.

    b. "Local interest calendar" means a calendar that is published for distribution no more than once annually; is available for distribution among the public; contains a calendar of events of local interest, which may include but is not limited to school schedules, the schedules of events of charitable organizations, and municipal, county and other government schedules of local interest; reference and emergency phone numbers of local interest; and advertising matter.

    2. This act shall take effect on the first day of the third month following enactment and apply to local interest calendars distributed on and after that date.

STATEMENT

    This bill changes the way that local interest calendars are taxed under the sales and use tax to alleviate the sales taxes on small business advertisers.

    Under current law local interest calendars, which are usually distributed "free" to residents of a community, are held to be sold to the advertisers in the local interest calendar. The sale price is held to be the amount the advertisers pay for their advertisements, so the current policy has the same effect as charging the advertisers sales taxes on their ads.

    This bill changes the law so that the advertisers are not the purchasers of the calendars, but that instead the purchaser of the calendar is the publisher or the distributor of the calendar. When the transaction between the publisher or distributor of the calendar is deemed the taxable sale, the measure of the tax due becomes the printer's bill for taxable printing services and materials costs, a measure of the tax that does not include the value of the advertising services provided by the local interest calendar publisher. This bill also makes the calendar publisher the taxpayer instead of the advertisers.

    This bill is consistent with the same policy of lowering the tax cost of small business advertising that led to the repeal of the sales tax on "yellow pages" advertising.

Changes measure of sales and use tax on certain local interest calendars from advertising receipts to receipts from printing.