New Jersey SB 2518 was signed by the governor and enacted on 1/31/2019 . This bill excludes certain out-of-State businesses and employees from certain State and local taxes, fees, and business registration requirements ordinarily imposed on in-State businesses when temporarily performing work or services within this State during a declared disaster or emergency. The bill provides that an out-of-State business that conducts operations within this State for purposes of performing work or rendering services related to a declared disaster or emergency during a disaster period will not be considered to have established a level of physical presence or engaged in business activities at a level that is sufficient to require that out-of-State business to register, file, and report and pay State or local taxes or fees or to require that out-of-State business, or its out-of-State employees, to be subject to any State or local licensing or registration requirements. In addition, the bill provides that an out-of-State employee shall not be considered to have established residency or a physical presence or engaged in business activities in this State that are sufficient to require that out-of-State employee or that out-of-State employee’s employer to report and pay State or local income taxes, to be subjected to State or local tax withholdings, or to report and pay any other State or local tax or fee during the disaster period.
The bill requires out-of-State businesses and employees to pay State and local transaction taxes and fees that the out-of-State business or out-of-State employee purchases for use or consumption in this State during the disaster period, unless those transactions are otherwise exempt, excluded, or not subject to tax or fee during a disaster period. Under the bill, transaction taxes and fees include, but are not limited to, fuel taxes, sales and use taxes on goods and services subject to taxation, hotel and motel occupancy taxes and fees, and motor vehicle rental taxes and fees. The bill stipulates that an out-of-State business or employee remaining in this State after the disaster period will be subject to the State’s normal standards for establishing physical presence or residency, engaging in business activity, and doing business in this State, and will be responsible for any ensuing State or local tax liabilities or requirements of the business or an employee of the business.
The bill requires an out-of-State business that enters this State to provide, not later than 30 days after the date the out-of-State business enters this State, a written statement to the director indicating that the out-of-State business is doing business in this State for purposes of responding to the declared disaster or emergency. The bill specifies that a business registered to do business in this State must provide a written statement that includes the information required to be provided to the director by out-of-State businesses for each out-of-State business affiliate that enters this State for purposes of responding to the declared disaster or emergency. The bill stipulates that an out-of-State business or employee that maintains a physical presence in this State or engages in business activity in this State after a disaster period must comply with all State and local business registration requirements and all licensing and filing requirements ensuing as a result of establishing the required business presence or residency in this State. The bill authorizes the Director of the Division of Taxation in the Department of the Treasury to adopt rules and regulations as the director determines to be necessary and appropriate to effectuate the purposes of the bill, and permits the immediate filing of those regulations with the Office of Administrative Law, effective for a period not to exceed 360 days following the bill’s effective date.
The bill takes effect immediately upon enactment. The purpose of this bill is to remove existing tax, business registration, and other requirements that impede the efficient deployment of out-of-State infrastructure workers to facilitate the restoration of critical infrastructure and utilities following a declared disaster or emergency in this State.