TRENTON – Legislation sponsored by Senators Barbara Buono and Joseph Vitale that would create several new exemptions in the sales tax, including dues and fees collected by nonprofit organizations such as the YMCA and parking charges collected by municipal and county controlled garages and lots, was given final approval by both houses of the Legislature today.
“When we passed the sales tax extension last year, it had been with the understanding that non-profits would remain exempt from its provisions,” said Senator Buono, D-Middlesex. “We were looking to make sure the sales tax was applied in a fair and sensible manner, not to burden groups like the YMCA with new taxes.”
“When the Treasury decided that these non-profits would need to collect taxes from their members, it was clear that we needed to counteract such an illogical decision,” said Senator Vitale, D-Middlesex. “Moving forward, these organizations can continue their critical work without the worries of collecting taxes from their members.”
The Senators noted that the Department of the Treasury originally announced last August that organizations such at the YMCA would be exempt from the sales tax because of their non-profit status, but subsequently reversed that decision in September.
The bill, S-2269/2289, would exempt the fees and dues that are charged for access to health and fitness, athletic, sporting, and shopping clubs and facilities of nonprofit organizations and local governments, which were made taxable under the provisions of the sales tax extensions enacted in July. In addition, the bill would eliminate taxes on parking fees if the services are provided by a county or local government.
“As we move forward in the fight to reverse global warming, mass transit will be more important than ever. The parking tax was acting as a disincentive for people to use mass transit and was counterproductive towards the state’s broader goals.,” added Senator Buono.
The Treasury Department ruling came just days before the sales tax changes went into effect and many groups affected by the ruling are finding it difficult to collect the sales tax retroactively on yearly dues paid before October 1. Groups such as the YMCA have reported that they have had to reduce program offerings in order to make up the difference.
“In most New Jersey communities, nonprofit organizations like the YMCA are an integral part of that community’s well-being. The decision left them in the lurch and it was simply the right thing to do to remedy the situation so that they won’t face permanent program cuts,” added Senator Vitale.
The bill passed the Assembly by vote of 78-0-2 and subsequently the Senate concurred with Assembly amendments by a vote of 37-0. The bill now goes to the Governor’s desk for his approval.