New Jersey adopts Economic Nexus Rules, Impacts Dealers in Other States

Following the June 21, 2018 U.S. Supreme Court decision in South Dakota v. Wayfair to overturn the requirement that remote sellers must have a physical presence in a state in order to be required to collect that state’s sales tax, the state of New Jersey has enacted economic nexus provisions consistent with this ruling.

Effective Oct. 1, 2018, a non-New Jersey dealer conducting business with New Jersey customers for delivery within the state of New Jersey must register, collect and remit New Jersey sales tax if that dealer meets either of the following thresholds:

  • That dealer has gross revenue from delivery of tangible personal property, specified digital products or services into New Jersey during the current or prior calendar year that exceeds $100,000 or
  • That dealer sold tangible personal property, specified digital products or services for delivery into New Jersey in 200 or more separate transactions during the current or prior calendar year.

Only a non-New Jersey dealer that meets either one of the criteria above has an obligation to register and comply with their New Jersey tax liabilities. A non-New Jersey dealer that fails to meet either of the criteria above may choose to voluntarily register with the state, collect tax and remit. This will apply on a prospective basis only as of October 1, and will not alter a taxpayers obligations for any activity prior to that date.