N.J. Admin. Code § 18:24-32.6

Current through Register Vol. 56, No. 24, December 18, 2024

Section 18:24-32.6 - Sourcing

(a) The general rule, for leases or rentals of tangible personal property other than motor vehicles, trailers, or aircraft, or transportation equipment is as follows:

1. If a lease or rental does not require periodic payments, the lump sum or accelerated payment is sourced, for sales and use tax purposes, to the location where the leased property was first transferred to the lessee, that is, either to the seller's place of business or to the location of the delivery; and

2. If the lease or rental does require periodic payments, the first periodic payment and any down payment, rebate, or other taxable receipts at the inception of the lease are sourced to the primary property location. Subsequent periodic payments will also be sourced, for sales and use tax purposes, to the primary property location provided by the lessee to the lessor in good faith.

(b) Sourcing for leases and rentals of motor vehicles, trailers, semi-trailers, or aircraft that do not qualify as transportation equipment is treated as follows:

1. If the lease requires periodic payments, each periodic payment is sourced to the primary property location, that is, the address provided by the lessee, in good faith, and maintained in the lessor's ordinary business records in good faith.

2. If the lease does not require periodic payments, the payment is sourced the same as a retail sale, that is, to the location where the property is delivered.

3. This subsection does not affect the requirement of collecting and remitting sales tax on an accelerated basis on leases for a term of more than six months.

(c) Sourcing for leases and rentals of transportation equipment is treated as follows:

1. Leases or rentals of transportation equipment are sourced to the location where the leased property was first transferred to the lessee, that is, either the seller's place of business or the location of delivery.

N.J. Admin. Code § 18:24-32.6

Amended by 48 N.J.R. 824(a), effective 5/16/2016