the staff of the Ridgewood blog
Trenton NJ, New Jersey has yet another new tax law on the books that will soon require most e-commerce websites to collect sales taxes and send the revenue to Trenton whenever they sell products to Garden State residents and the new tax policy goes into effect next month, just in time for the start of this year’s holiday shopping season.
Signed into law by Gov. Phil Murphy last week, the policy change comes several months after a major U.S. Supreme Court ruling made it clear that states have a right to require that companies collect sales taxes in the states where they are selling products online even if they don’t have a physical presence there.
Legislation sponsored by Democrat Assemblymen John Burzichelli and Paul Moriarty to ensure a level playing field between brick-and-mortar businesses and online marketplace providers like Amazon, and bring in needed revenue to the state has been signed into law.The new law (A-4496) will require certain remote sellers and online marketplace facilitators to collect and remit sales tax.
New Jersey’s new law will require online retailers and marketplaces like eBay to begin collecting sales taxes and turning the revenue over to the state if they have gross revenues over $100,000 a year in New Jersey, or if their in-state sales volume exceeds more than 200 transactions annually.
Lawmakers have portrayed the levying of online sales taxes as an issue of fairness for the state’s brick-and-mortar retailers, putting them on a more equal footing with online companies. The new policy, which takes effect on November 1, New Jersey could gain between $216 million and $351 million as a result of this legislation—about 2 to 4 percent of total 2016 state and local government general sales and gross receipts tax revenues— according to the United States Government Accountability Office (GAO) study in November 2017.
U.S. shoppers will spend $119.99 billion with online retailers during the upcoming holiday shopping season of Nov. 1-Dec. 31, Internet Retailer estimates. Online sales will increase 15.5% from the estimated $103.88 billion holiday shoppers spent online during the same period in 2017.
Total retail sales, excluding items not normally purchased online like fuel and automobiles, will jump 5.5% to $719.09 billion, up from $681.61 billion in November and December 2017, Internet Retailer projects. That suggests e-commerce will represent 16.7% of all holiday retail spending, compared with 15.2% in 2017.