Bill Text: NJ S2701 | 2016-2017 | Regular Session | Introduced
Bill Title: Clarifies sales tax collection responsibilities of horse-boarding businesses in New Jersey; makes change retroactive to October 1, 2006.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2016-10-13 - Introduced in the Senate, Referred to Senate Budget and Appropriations Committee [S2701 Detail]
Download: New_Jersey-2016-S2701-Introduced.html
Sponsored by:
Senator CHRISTOPHER "KIP" BATEMAN
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
SYNOPSIS
Clarifies sales tax collection responsibilities of horse-boarding businesses in New Jersey; makes change retroactive to October 1, 2006.
CURRENT VERSION OF TEXT
As introduced.
An Act clarifying the sales tax collection responsibilities of horse-boarding businesses in New Jersey, amending and supplementing P.L.1966, c.30.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 3 of P.L.1966, c.30 (C.54:32B-3) is amended to read as follows:
3. There is imposed and there shall be paid a tax of 7% upon:
(a) The receipts from every retail sale of tangible personal property or a specified digital product for permanent use or less than permanent use, and regardless of whether continued payment is required, except as otherwise provided in this act.
(b) The receipts from every sale, except for resale, of the following services:
(1) Producing, fabricating, processing, printing or imprinting tangible personal property or a specified digital product, performed for a person who directly or indirectly furnishes the tangible personal property or specified digital product, not purchased by him for resale, upon which such services are performed.
(2) Installing tangible personal property or a specified digital product, or maintaining, servicing, repairing tangible personal property or a specified digital product not held for sale in the regular course of business, whether or not the services are performed directly or by means of coin-operated equipment or by any other means, and whether or not any tangible personal property or specified digital product is transferred in conjunction therewith, except (i) such services rendered by an individual who is engaged directly by a private homeowner or lessee in or about his residence and who is not in a regular trade or business offering his services to the public, (ii) such services rendered with respect to personal property exempt from taxation hereunder pursuant to section 13 of P.L.1980, c.105 (C.54:32B-8.1), (iii) (Deleted by amendment, P.L.1990, c.40), (iv) any receipts from laundering, dry cleaning, tailoring, weaving, or pressing clothing, and shoe repairing and shoeshining and (v) services rendered in installing property which, when installed, will constitute an addition or capital improvement to real property, property or land, other than landscaping services and other than installing carpeting and other flooring.
(3) Storing all tangible personal property not held for sale in the regular course of business; the rental of safe deposit boxes or similar space; and the furnishing of space for storage of tangible personal property by a person engaged in the business of furnishing space for such storage.
"Space for storage" means secure areas, such as rooms, units, compartments or containers, whether accessible from outside or from within a building, that are designated for the use of a customer and wherein the customer has free access within reasonable business hours, or upon reasonable notice to the furnisher of space for storage, to store and retrieve property. Space for storage shall not include the lease or rental of an entire building, such as a warehouse or airplane hangar, or the lease or rental of a stall in a barn, stable, or other similar structure or facility for the boarding or stabling or for the keeping or holding of a horse, pony, mule, donkey, or hinny.
(4) Maintaining, servicing or repairing real property, other than a residential heating system unit serving not more than three families living independently of each other and doing their cooking on the premises, whether the services are performed in or outside of a building, as distinguished from adding to or improving such real property by a capital improvement, but excluding services rendered by an individual who is not in a regular trade or business offering his services to the public, and excluding garbage removal and sewer services performed on a regular contractual basis for a term not less than 30 days.
(5) Mail processing services for printed advertising material, except for mail processing services in connection with distribution of printed advertising material to out-of-State recipients.
(6) (Deleted by amendment, P.L.1995, c.184).
(7) Utility service provided to persons in this State, any right or power over which is exercised in this State.
(8) Tanning services, including the application of a temporary tan provided by any means.
(9) Massage, bodywork or somatic services, except such services provided pursuant to a doctor's prescription.
(10) Tattooing, including all permanent body art and permanent cosmetic make-up applications, except such services provided pursuant to a doctor's prescription in conjunction with reconstructive breast surgery.
(11) Investigation and security services.
(12) Information services.
(13) Transportation services originating in this State and provided by a limousine operator, as permitted by law, except such services provided in connection with funeral services.
(14) Telephone answering services.
(15) Radio subscription services.
Wages, salaries and other compensation paid by an employer to an employee for performing as an employee the services described in this subsection are not receipts subject to the taxes imposed under this subsection (b).
Services otherwise taxable under paragraph (1) or (2) of this subsection (b) are not subject to the taxes imposed under this subsection, where the tangible personal property or specified digital product upon which the services were performed is delivered to the purchaser outside this State for use outside this State.
(c) (1) Receipts from the sale of prepared food in or by restaurants, taverns, or other establishments in this State, or by caterers, including in the amount of such receipts any cover, minimum, entertainment or other charge made to patrons or customers, except for meals especially prepared for and delivered to homebound elderly, age 60 or older, and to disabled persons, or meals prepared and served at a group-sitting at a location outside of the home to otherwise homebound elderly persons, age 60 or older, and otherwise homebound disabled persons, as all or part of any food service project funded in whole or in part by government or as part of a private, nonprofit food service project available to all such elderly or disabled persons residing within an area of service designated by the private nonprofit organization; and
(2) Receipts from sales of food and beverages sold through vending machines, at the wholesale price of such sale, which shall be defined as 70% of the retail vending machine selling price, except sales of milk, which shall not be taxed. Nothing herein contained shall affect other sales through coin-operated vending machines taxable pursuant to subsection (a) above or the exemption thereto provided by section 21 of P.L.1980, c.105 (C.54:32B-8.9).
The tax imposed by this subsection (c) shall not apply to food or drink which is sold to an airline for consumption while in flight.
(3) For the purposes of this subsection:
"Food and beverages sold through vending machines" means food and beverages dispensed from a machine or other mechanical device that accepts payment; and
"Prepared food" means:
(i) A. food sold in a heated state or heated by the seller; or
B. two or more food ingredients mixed or combined by the seller for sale as a single item, but not including food that is only cut, repackaged, or pasteurized by the seller, and eggs, fish, meat, poultry, and foods containing these raw animal foods requiring cooking by the consumer as recommended by the Food and Drug Administration in Chapter 3, part 401.11 of its Food Code so as to prevent food borne illnesses; or
C. food sold with eating utensils provided by the seller, including plates, knives, forks, spoons, glasses, cups, napkins, or straws. A plate does not include a container or packaging used to transport the food;
provided however, that
(ii) "prepared food" does not include the following sold without eating utensils:
A. food sold by a seller whose proper primary NAICS classification is manufacturing in section 311, except subsector 3118 (bakeries);
B. food sold in an unheated state by weight or volume as a single item; or
C. bakery items, including bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, and tortillas.
(d) The rent for every occupancy of a room or rooms in a hotel in this State, except that the tax shall not be imposed upon a permanent resident.
(e) (1) Any admission charge to or for the use of any place of amusement in the State, including charges for admission to race tracks, baseball, football, basketball or exhibitions, dramatic or musical arts performances, motion picture theaters, except charges for admission to boxing, wrestling, kick boxing or combative sports exhibitions, events, performances or contests which charges are taxed under any other law of this State or under section 20 of P.L.1985, c.83 (C.5:2A-20), and, except charges to a patron for admission to, or use of, facilities for sporting activities in which such patron is to be a participant, such as bowling alleys and swimming pools. For any person having the permanent use or possession of a box or seat or lease or a license, other than a season ticket, for the use of a box or seat at a place of amusement, the tax shall be upon the amount for which a similar box or seat is sold for each performance or exhibition at which the box or seat is used or reserved by the holder, licensee or lessee, and shall be paid by the holder, licensee or lessee.
(2) The amount paid as charge of a roof garden, cabaret or other similar place in this State, to the extent that a tax upon such charges has not been paid pursuant to subsection (c) hereof.
(f) (1) The receipts from every sale, except for resale, of intrastate, interstate, or international telecommunications services and ancillary services sourced to this State in accordance with section 29 of P.L.2005, c.126 (C.54:32B-3.4).
(2) (Deleted by amendment, P.L.2008, c.123)
(g) (Deleted by amendment, P.L.2008, c.123)
(h) Charges in the nature of initiation fees, membership fees or dues for access to or use of the property or facilities of a health and fitness, athletic, sporting or shopping club or organization in this State, except for: (1) membership in a club or organization whose members are predominantly age 18 or under; and (2) charges in the nature of membership fees or dues for access to or use of the property or facilities of a health and fitness, athletic, sporting or shopping club or organization that is exempt from taxation pursuant to paragraph (1) of subsection (a) of section 9 of P.L.1966, c.30 (C.54:32B-9), or that is exempt from taxation pursuant to paragraph (1) or (2) of subsection (b) of section 9 of P.L.1966, c.30 and that has complied with subsection (d) of section 9 of P.L.1966, c.30.
(i) The receipts from parking, storing or garaging a motor vehicle, excluding charges for the following: residential parking; employee parking, when provided by an employer or at a facility owned or operated by the employer; municipal parking, storing or garaging; receipts from charges or fees imposed pursuant to section 3 of P.L.1993, c.159 (C.5:12-173.3) or pursuant to an agreement between the Casino Reinvestment Development Authority and a casino operator in effect on the date of enactment of P.L.2007, c.105; and receipts from parking, storing or garaging a motor vehicle subject to tax pursuant to any other law or ordinance.
For the purposes of this subsection, "municipal parking, storing or garaging" means any motor vehicle parking, storing or garaging provided by a municipality or county, or a parking authority thereof.
(cf: P.L.2013, c.193, s.1)
2. (New section) Charges for storing a horse, pony, mule, donkey, or hinny in a barn, stable, or other similar structure or facility by a person engaged in the business of boarding or stabling or otherwise keeping or holding horses, ponies, mules, donkeys, or hinnies are exempt from the tax imposed pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.).
3. (New section) Charges for maintaining or servicing a horse, pony, mule, donkey, or hinny that is boarded or stabled or that is kept or held in a barn, stable, or other similar structure or facility by a person engaged in the business of boarding or stabling or otherwise keeping or holding horses, ponies, mules, donkeys, or hinnies are exempt from the tax imposed pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.).
4. (New section) a. The director shall refund any tax, penalty, or interest collected or paid on or after October 1, 2006 but before the effective date of P.L. , c. (pending before the Legislature as this bill) in connection with any receipts from sales or charges that have been excluded or exempted from tax pursuant to section 1, 2, or 3 of P.L. , c. (pending before the Legislature as this bill), if application to the director for refund is filed, notwithstanding the limitations on the time prescribed for filing a claim for refund by section 20 of P.L.1966, c.30 (C.54:32B-20) or by R.S.54:49-14 to the contrary, within 24 months of the effective date of P.L. , c. (pending before the Legislature as this bill).
b. An application for refund allowed pursuant to this section may be filed by a customer who paid the tax or by a person required to collect the tax, who has collected and paid over the tax to the director, on forms furnished by the director and accompanied by any information and documentation that the director determines to be necessary and appropriate to verify the tax, penalty, or interest collected or paid and to establish, if application is filed by a person required to collect the tax, that the person has repaid to the customer the amount of any tax for which the application for refund is filed.
c. The director shall examine each application for refund filed pursuant to this section and shall make a determination regarding a refund, based upon such rules and regulations as may be prescribed by the director, within 90 days of the date the application for refund is filed.
d. If upon examination of an application for refund filed pursuant to this section, the director determines that there has been an overpayment of tax, penalty, or interest, the amount of the overpayment shall be credited against any State tax liability of the person and, if there is no State tax liability, the person shall be allowed a refund of the overpaid tax, penalty, or interest. Interest shall be allowed and paid on the amount of any overpayment not credited or refunded within 90 days of the date the director's determination for refund is made at the rate required to be paid on overpayments pursuant to section 7 of P.L.1992, c.175 (C.54:49-15.1), determined for each month or fraction thereof, compounded annually at the end of each year, from the date the director's determination for refund is made until the date the credit or refund of overpayment is made.
e. If upon examination of an application for refund filed pursuant to this section, the director rejects the application, in whole or in part, the director shall make an order accordingly and serve notice to the person who filed the application for refund within 10 days of the date the director's determination for refund is made. A person aggrieved by the director's determination may, within 90 days of the date notice is served, file a protest and request a hearing in accordance with the procedures established for aggrieved taxpayers pursuant to R.S.54:49-18.
5. Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the Director of the Division of Taxation in the Department of the Treasury may adopt immediately upon filing with the Office of Administrative Law such rules and regulations as the director determines to be necessary and appropriate to effectuate the purposes of P.L. , c. (pending before the Legislature as this bill), which shall be effective for a period not exceeding 360 days following the effective date of P.L. , c. (pending before the Legislature as this bill) and may thereafter be amended, adopted, or readopted by the director in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).
6. This act shall take
effect immediately; provided however, that section 1, 2, and 3 shall be
retroactive to October 1, 2006 and apply to all services rendered on or after
that date.
STATEMENT
This bill clarifies the sales tax collection responsibilities of horse-boarding business in New Jersey by providing an exemption from tax for the lease or rental of certain stable stalls and charges for horse boarding and certain other related services.
Under the bill, the taxable service of "furnishing space for storage" is redefined to exclude from tax charges for the lease or rental of certain stable stalls. The bill provides that the service of "furnishing space for storage" does not include, and the taxable service therefore does not apply to, charges for the lease or rental of a stall in a barn, stable, or other similar structure or facility for the boarding or stabling or for the keeping or holding of a horse, pony, mule, donkey, or hinny.
The bill exempts from tax certain charges for boarding a horse. The bill provides that charges for storing a horse, pony, mule, donkey, or hinny in a barn, stable, or other similar structure or facility by a person engaged in the business of boarding or stabling or otherwise keeping or holding horses, ponies, mules, donkeys, or hinnies are exempt from the sales tax.
The bill also exempts from tax certain services provided for the care of horses boarded by persons engaged in the business of boarding horses. The bill provides that charges for maintaining or servicing a horse, pony, mule, donkey, or hinny that is boarded or stabled or that is kept or held in a barn, stable, or other similar structure or facility by a person engaged in the business of boarding or stabling or otherwise keeping or holding horses, ponies, mules, donkeys, or hinnies are exempt from the sales tax.
The bill takes effect immediately and applies retroactively to October 1, 2006. The bill establishes a refund procedure that provides taxpayers a 24-month window to apply for a refund for any taxes, penalties, and interest collected or paid in connection with eligible sales and charges between October 1, 2006 and the effective date of the bill.
The purpose of this bill is to clarify the tax collection responsibilities of horse-boarding businesses in this State. The Division of Taxation in the Department of the Treasury has failed to provide clear and consistent guidance on the taxability of horse boarding and other related services typically provided to horses under board.
This failure has created confusion within the horse-boarding community and resulted in uncertainty regarding the tax obligations of certain taxpayers. Recent audits undertaken by the Division of Taxation have exacerbated the issue and resulted in the closure of some horse-boarding businesses that have been assessed taxes, penalties, and interest for sales and charges that, in some instances, date back to the fall of 2006.
The failure to provide clear and consistent guidance also has placed New Jersey horse-boarding businesses at a competitive disadvantage with similar businesses in surrounding states. In states like Pennsylvania, the law is clear that businesses are not required to charge and collect sales tax on charges for boarding horses.
By providing an exemption for horse boarding and related services, this bill eliminates the confusion and provides clarity to the tax obligations of New Jersey businesses. Additionally, by providing an exemption the bill levels the playing field for horse-boarding businesses within this State and their out-of-State counterparts.
