NJ Tax Audit Times
You're Kidding Right? New Jersey Actually Taxes Personal Proptective Equipment!
Re: New Jersey's Sales Tax Subjectivity of Personal Protective Equipment (PPE)
The New Jersey Division of Taxation's applicable statute (54:32B-8.4) and regulations (18:24-6.3) & (18:24-6.4) plainly state that, among other things, protective equipment purchased for personal use (PPE) is, in fact, subject to NJ Sales & Use Tax (S&UT).
Nonetheless, I am not convinced.
Moreover, I contend that PPE, like a face mask or covering for example, is not subject to NJ S&UT and I will attempt to explain and reasonably support my assertion, as more fully detailed below.
The above listed statute (54:32B-8.4) concerns, among other things, New Jersey's clothing tax exemption. Per review of the statute, It's noted that, generally, clothing is tax exempt. Furthermore, the statute goes on to say that the tax exemption does not apply to protective equipment, unless the equipment is necessary for the daily work of the user (business use). Then deductively, protective equipment purchased by an individual for his or her own personal use is subject to S&UT.
Clothing is defined in the statute as "all human wearing apparel suitable for general use" and specifically excludes, among other things, "protective equipment."
Protective equipment is defined in the statute as "items for human wear and designed as protection of the wearer against injury or disease ... but not suitable for general use."
The first regulation listed above (18:24-6.3) further explains and defines the clothing exemption and list numerous examples of tax exempt items. Additionally, the regulation states that the tax exemption does not apply to protective equipment, which has its own tax exemption as listed below.
Note: Apparel not only includes what one might typically consider to be clothing, but also items such as lab coats, hospital gowns, bathing caps, bibs, steel-toed shoes, hats, gloves, and numerous other items.
The second regulation listed above (18:24-6.4) further explains and defines tax exempt protective equipment, which is a separate tax exemption from the clothing exemption. Additionally, in order to qualify for this tax exemption, the regulation requires that the equipment must be necessary for the user's daily work (business use). Numerous examples of tax exempt items are listed, which include face masks. The regulation also states that protective equipment that is not necessary for the user's daily work is subject to S&UT. Thus, protection equipment purchased for personal use is subject to S&UT.
So, based on the information as listed above, it appears that protective equipment (ex: face masks) purchased for personal use is subject to NJ Sales and Use Tax.
Nonetheless, I am not convinced.
Moreover, I contend that PPE, like a face mask or covering for example, is not subject to NJ S&UT and I will attempt to explain and reasonably support my assertion, as more fully detailed below.
The above listed statute (54:32B-8.4) concerns, among other things, New Jersey's clothing tax exemption. Per review of the statute, It's noted that, generally, clothing is tax exempt. Furthermore, the statute goes on to say that the tax exemption does not apply to protective equipment, unless the equipment is necessary for the daily work of the user (business use). Then deductively, protective equipment purchased by an individual for his or her own personal use is subject to S&UT.
Clothing is defined in the statute as "all human wearing apparel suitable for general use" and specifically excludes, among other things, "protective equipment."
Protective equipment is defined in the statute as "items for human wear and designed as protection of the wearer against injury or disease ... but not suitable for general use."
The first regulation listed above (18:24-6.3) further explains and defines the clothing exemption and list numerous examples of tax exempt items. Additionally, the regulation states that the tax exemption does not apply to protective equipment, which has its own tax exemption as listed below.
Note: Apparel not only includes what one might typically consider to be clothing, but also items such as lab coats, hospital gowns, bathing caps, bibs, steel-toed shoes, hats, gloves, and numerous other items.
The second regulation listed above (18:24-6.4) further explains and defines tax exempt protective equipment, which is a separate tax exemption from the clothing exemption. Additionally, in order to qualify for this tax exemption, the regulation requires that the equipment must be necessary for the user's daily work (business use). Numerous examples of tax exempt items are listed, which include face masks. The regulation also states that protective equipment that is not necessary for the user's daily work is subject to S&UT. Thus, protection equipment purchased for personal use is subject to S&UT.
So, based on the information as listed above, it appears that protective equipment (ex: face masks) purchased for personal use is subject to NJ Sales and Use Tax.
Wait a minute! Let's take a deeper dive into this issue and think a bit outside the box!
Wait a minute! Let's take a deeper dive into this issue and think a bit outside the box!
Issue to Contemplate
In accordance with the New Jersey Division of Taxation's existing statute & regulations, should a face mask and other types of wearable protective equipment purchased for the user's personal use, and not for the user's daily work, remain protective equipment subject to NJ S&UT, or alternatively, does the purchase of the PPE now meet New Jersey's definition of clothing and thus qualify for the clothing tax exemption?
History and Rationale
Certainly the NJ Division of Taxation's statutes and regulations, when written, could not have possibly forseen the brutally awful Covid 19 Virus. Thus, prior to the Coronavirus, personal face masks and other types of wearable PPE were properly classified as not suitable for general use, which made these items subject to tax unless they were necessary for the user's daily work. However, upon commencement of the Coronavirus and thereafter, wearable PPE are not only suitable for general use, but have also been mandated for use by the NJ State government throughout New Jersey, both indoors and outside.
Contention
Since face masks and other types of wearable protective equipment are now commonplace in our society and are considered to be human wearing apparel totally suitable for general use, I contend that these types of PPE should now be considered clothing, and therefore not subject to NJ S&UT.
Accordingly, face masks and other types of wearable PPE, should now qualify as tax exempt clothing and no longer be subject to NJ Sales and Use Tax!
Accordingly, face masks and other types of wearable PPE, should now qualify as tax exempt clothing and no longer be subject to NJ Sales and Use Tax!
Additional Comments
- Apparently, the above issue has reached new heights as both the NJ Senate and Assembly have recently introduced legislation proposing to make personal protective face coverings (S 3133) and an assortment of personal protective equipment (S 3124) exempt from New Jersey Sales and Use Tax.
- Hooray for the Keystone State of Pennsylvania as they now consider face masks to be clothing, and thus tax exempt. Click on the link for more information: https://revenue-pa.custhelp.com/app/answers/detail/a_id/3748/related/1.
- Should a NJ State Auditor attempt to tax the taxpayer's purchases of wearable PPE, I would strongly argue that PPE is tax exempt under New Jersey's current/existing S&UT clothing exemption.
- Recently, I purchased a boatload of Purell online from eBay. Much to my dismay, I was charged New Jersey Sales Tax. After spending quite a good deal of time going back and forth, eBay finally credited my account for the erroneously collected sales tax. I had to fully explain to the representatives at eBay that NJ offers a tax exemption for drug products that are used in the prevention of disease and contain a Drug Facts panel (label) on the container which list the active ingredients. In this instant, the panel listed alcohol @ 62%. Thus, purchases of Purell hand sanitizer, and most other types of similar products containing alcohol, are not subject to NJ Sales and Use Tax.
- Please note that some of the information as herein provided is just my opinion and should not be considered, nor relied on, as tax advice.
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