New Jersey-2024-S3654-Introduced

An Act establishing an annual two month exemption period under the sales and use tax for certain retail sales of school supplies and 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. Receipts from retail sales of the following products are exempt from the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) if the products are sold to an individual purchaser for non-business use during the exemption period:

(1) computers with a sales price of less than $3,000 per item;

(2) school computer supplies with a sales price of less than $1,000 per item;

(3) school supplies;

(4) school art supplies; and

(5) school instructional materials.

b. As used in this section:

"Annual exclusion period" means the period of time between 12:01 a.m. on the first day in August of each year and 11:59 p.m. on the 30th day in September of each year.

"Computers" means electronic devices that accept information in digital or similar form and manipulate it for a result based on a sequence of instructions.

"Electronic" means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

"School art supplies" means items commonly used by a student in a course of study for artwork, and shall include: clay and glazes; paints, including acrylic, tempera, and oil; paintbrushes used for artwork; sketch and drawing pads; and watercolors.

"School computer supplies" means items commonly used by a student in a course of study in which a computer is used, and shall include: computer storage media, diskettes, and compact disks; handheld electronic schedulers, except devices that are cellular phones; personal digital assistants, except devices that are cellular phones; computer printers; and printer supplies for computers, printer paper, and printer ink.

"School instructional materials" means written materials commonly used by a student in a course of study as a reference and to learn the subject being taught, and shall include: reference books; reference maps and globes; textbooks; and workbooks.

"School supplies" means items commonly used by a student in a course of study, and shall include: binders; book bags; calculators; cellophane tape; blackboard chalk; compasses; composition books; crayons; erasers; folders, including expandable folders, pocket folders, plastic folders, and manila folders; glue, paste, and paste sticks; highlighters; index cards; index card boxes; legal pads; lunch boxes; markers; notebooks; paper, including loose leaf ruled notebook paper, copy paper, graph paper, tracing paper, manila paper, colored paper, poster board, and construction paper; pencil boxes and other school supply boxes; pencil sharpeners; pencils; pens; protractors; rulers; scissors; and writing tablets.

2. 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 regulations as the director deems necessary to implement the provisions of section 1 of P.L. . c. (C. ) (pending before the Legislature as this bill) and to maintain compliance with the Streamlined Sales and Use Tax Agreement, which regulations shall be effective for a period not to exceed 180 days from the date of the filing. The regulations may therefore be amended, adopted, or readopted by the director as the director deems necessary in accordance with P.L.1968, c.410.

3. This act shall take effect immediately and shall apply to retail sales made during annual exemption periods beginning at least 60 days following enactment.

STATEMENT

This bill establishes an annual "back-to-school" sales tax holiday in the State of New Jersey during August and September. During the two month period, the retail purchases of certain personal computers with a sales price of less than $3,000, school computer supplies with a sales price of less than $1,000 per item, and certain school supplies and equipment made by individual shoppers for non-business purposes will be exempt from the State sales tax. While the tax holiday is intended to provide financial relief to the students of New Jersey and their families, the general public may also make tax-free purchases for other nonbusiness uses during this time period.

Annual and temporary sales tax holidays have been established in at least 19 states and the District of Columbia, and have gained popularity and support in several others. While some states have opted to celebrate tax holidays at the beginning of the calendar year or during seasonal holiday periods, a majority of states have established tax moratoria during some portion of the late summer and early autumn back-to-school period, as families prepare to send their children back to school. These tax holidays typically include exemptions for purchases of educational supplies, consumer products, and clothing items that allow students to face the challenges of the coming year.

Under the bill, tax exempt school supplies and equipment during the holiday include: (1) school supplies, such as pens and pencils, notebooks, and binders; (2) school art supplies, such as paints and paintbrushes, clay, and glazes; (3) school instructional materials, such as maps, globes, reference books, and workbooks; (4) computers with a sales price of less than $3,000 per item; and (5) school computer supplies, such as computer storage equipment, printers, and personal digital assistants, with a sales price of less than $1,000 per item.

Unlike other tax relief initiatives, the establishment of a back-to-school sales tax holiday in New Jersey could be developed and implemented with minimal administrative effort. It would provide an administratively simple and effective way to cut taxes for consumers that would require no special taxpayer forms or rebate applications. In addition, it would be economically beneficial to the State's merchants and small business owners by encouraging consumer spending during a period of time when demand is typically soft.