ASSEMBLY, No. 2859

STATE OF NEW JERSEY

INTRODUCED MAY 1, 1997

By Assemblywoman J.SMITH and Assemblyman GREGG

An Act providing a sales and use tax exemption for coin-operated car washes, supplementing P.L.1966, c.30.

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

    1. Receipts from sales of coin-operated car washes sold through a facility available to the public are exempt from the tax imposed under the "Sales and Use Tax Act." As used in this section, "coin-operated car wash" means the cleaning of a motor vehicle by the purchaser, without any assistance from the vendor or any agent or employee of the vendor, by means of inserting currency, either as coins or paper money, into the slot of a receptacle in or on a device or machine to activate the flow of water or cleansing agents, or both, through a hose or wand mechanism for a certain period of time so that the purchaser may use the flow to wash or rinse the vehicle.

    2. This act shall take effect on the first day of the third month following enactment.

STATEMENT

    The bill provides a sales tax exemption for coin-operated car washes, as that term is defined in the bill.

    In general, the sales tax on the price of a coin-operated car wash is an amount less than $0.25 and, therefore, very difficult to collect given the way the currency-operated devices in use are designed and calibrated. The result is that the owner or operator of the car wash facility must manipulate the price charged for the car wash to collect the odd amount of sales tax; this results in the owner or operator being forced to either collect less than the true value of the wash or collect more, thereby overcharging the purchasers, in order to arrive at an amount for the charge that can be broken into currency denominations the standard devices will readily accept.

    It is estimated that this exemption, which will ease the burden for the coin-operated car wash industry, will have only a minimal impact on State sales and use tax collections.