The New Jersey Division of Taxation has updated its “Frequently Asked Questions” guidance pertaining to changes for determining nexus for sales and use tax purposes for remote sellers based outside the state. In response to the U.S. Supreme Court case of South Dakota v. Wayfair, New Jersey enacted P.L. 2018, c.132, which imposes sales tax collection and remittance requirements on remote sellers with sales that exceed the new nexus threshold. The new threshold is either: (1) the remote seller’s gross revenue from sales of tangible personal property, specified digital products or services delivered into New Jersey during the current or prior calendar year exceeds $100,000; or (2) the remote sellers sold tangible personal property, specified digital products, or services delivered into New Jersey in 200 or more separate transactions during the current or prior calendar year.

The Division’s guidance provides additional clarity on the following key points:

  • The nexus changes took effect beginning on November 1, 2018 and are not applied retroactively to prior periods.
  • In computing the $100,000 sales threshold for nexus, all sales delivered into the state are included—this includes nontaxable retail sales as well.

Continue Reading New Jersey Division of Taxation Provides Additional Guidance for Remote Sellers

The New Jersey Division of Taxation has recently created a webpage with a host of different guidance documents and FAQs the Division has put together to answer questions and provide more clarity on combined reporting, the new surtax, GILTI treatment and other corporate income tax changes.

The guidance can be accessed here.

 

Last week Governor Murphy approved legislation, Assembly bill 4495, which contained a number of technical tax changes, including the restoration of the exemption from Gross Income Tax (“GIT”) for the sale of Grow New Jersey tax credits by pass-through entities.

Since, pass-through businesses do not pay corporation business tax, these businesses must sell their Grow New Jersey tax credits to monetize the benefits.  At the end of 2017, legislation was enacted which provided an exemption from GIT for the sale of these tax credits.  However, as part of a myriad of tax changes enacted this past summer via P.L. 2018, c.48, the GIT exemption was eliminated.

As part of Assembly bill 4495, GIT will not be imposed on the sale of Grow New Jersey tax credits issued pursuant to an award approved by the New Jersey Economic Development Authority prior to July 1, 2018 regardless of when the sale of the tax credits occurs.  This is a welcome development and correction for New Jersey tax and economic development policy.

As seen on: ROI-NJ
By: Tom Bergeron

In this ROI-NJ interview, Sills Cummis’ Ted Zangari and Jaime Reichardt share their insights on the recently enacted federal Opportunity Zone Program.

Ted Zangari, chair of the Redevelopment Law Practice Group at Sills Cummis & Gross P.C. in Newark, is one of the most prominent public incentives and real estate attorneys in the state. His law firm colleague Jaime Reichardt chairs the firm’s state and local tax practice and has advised clients on all sorts of complicated federal and state taxation issues.

> Link to full article

After weeks of negotiation and discussion regarding competing tax proposals in Trenton, a deal has been struck on the state budget and tax reform by Governor Phil Murphy and legislative leaders. The result is a host of business tax changes enacted as part of Assembly Bills A-3088, A-3438 and A-4202. Here is a summary of some of the major business tax changes set to take effect in New Jersey:

Tax Amnesty

  • A-3438 provides for a 90-day tax amnesty period to run through no later than January 15, 2019.
  • Under the new amnesty, any taxpayer with liabilities for returns due on or after February 1, 2009, can pay the tax, plus half the interest due as of November 1, 2018 and avoid any penalties with the exception of criminal and civil fraud penalties.
  • An eligible taxpayer cannot be notified of or be under criminal action or investigation.
  • The new law also imposes a 5 percent non-participation penalty for liabilities eligible for amnesty that are subsequently discovered by the Division of Taxation.

Continue Reading New Jersey Taxes—They Are a-Changing…

Today, the U.S. Supreme Court issued a landmark decision in the state and local tax world which overturns precedent going back to 1992. The decision, South Dakota v. Wayfair, No.17-494 (June 21, 2018), means that state and local taxing jurisdictions throughout the country can now compel online sellers to collect sales tax for sales made to customers in that particular state or local jurisdiction, even if the seller does not have a presence there.

Continue Reading U.S. Supreme Court Overturns Quill: Online Sellers Can Now be Compelled to Collect Sales Tax

In February 2018, the New Jersey Tax Court delivered another blow to the Division of Taxation’s (the “Division”) attempts to use partnership income tax withholding to tax out-of-state limited partners. In so doing, the Tax Court has arguably called into question New Jersey’s entire partnership remittance or withholding regime.

Case Discussion

In National Auto Dealers Exchange, L.P. v. Director, Division of Taxation, No. 000028-2014, the Tax Court held that the Division could not impose the partnership remittance in accordance with N.J.S.A. 54:10A-15.11 on a limited partnership whose 99-percent corporate limited partner declared that it maintained a regular place of business in New Jersey.

Continue Reading New Jersey’s Taxation of Limited Partnerships: The Saga Continues

As seen on:  ROI-NJ.com

Gov. Phil Murphy’s decision to reactivate Urban Enterprise Zones for five years in five communities across the state was met with applause from municipal and association leaders.

Murphy signed legislation Wednesday to reinstate UEZs in Bridgeton, Camden, Newark, Plainfield and Trenton until Dec. 31, 2023.

Link to full article

Late last week, the governors of New York and Pennsylvania submitted their selections for opportunity zone designations to the U.S. Department of Treasury. Those nominations are expected to be approved by Treasury to take advantage of the new federal tax incentive program.  The federal Opportunity Zone program is a new tax incentive designed to direct investor capital into various low-income and distressed areas around the country. The program affords investors the opportunity to defer and reduce capital gains that are invested in opportunity funds. In addition, an investor who holds an interest in an opportunity fund for 10 years or more does not pay any tax on the gain when the opportunity fund investment is sold or transferred.  Additional details can be found in an earlier article we published here.

A listing of New York’s 514 zone nominations can be found here.

A listing of Pennsylvania’s 300 zone nominations can be found here.

We will continue to keep you updated as more details emerge on this transformative program, including expected guidance from the Internal Revenue Service regarding qualified opportunity fund certification and qualified opportunity zone property.

The U.S. Department of Treasury’s Community Development Financial Institutions Fund has just released the list of New Jersey’s approved Opportunity Zones. The Opportunity Zones are identified by specific census tracts provided below.

The federal Opportunity Zone program is a new tax incentive designed to direct investor capital into various low-income and distressed areas around the country. On March 21, Governor Murphy submitted New Jersey’s list of eligible census tracts seeking Opportunity Zone designation.

Continue Reading New Jersey “Opportunity Zones” Just Revealed