LEGISLATIVE FISCAL ESTIMATE
SENATE, No. 3604
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: DECEMBER 5, 2024
SUMMARY
Synopsis: Eliminates transaction nexus requirement for remote sellers under the
Sales and Use Tax Act.
Type of Impact: Annual State revenue loss to General Fund.
Agencies Affected: Department of the Treasury.
Office of Legislative Services Estimate
Fiscal Impact FY 2026 and Each FY Thereafter
Annual State Revenue Loss Indeterminate
 The Office of Legislative Services (OLS) expects this legislation will result in an annual State
revenue loss, though the magnitude cannot be determined due to data limitations regarding
remote seller transactions.
 The revenue reduction will be proportional to the number of sellers currently collecting sales
tax solely due to meeting the 200-transaction threshold. Although the OLS is unable to
determine the number of remote sellers that would be affected by the bill, the OLS notes that
each remote seller affected by the bill would result in a reduction of no more than $6,625 in
annual sales tax collections.
BILL DESCRIPTION
This bill eliminates the transaction nexus requirement for remote sellers under the Sales and
Use Tax Act. Currently, remote sellers must collect and remit sales tax if they either have gross
revenue from New Jersey sales exceeding $100,000 or conduct 200 or more separate transactions
in New Jersey. The bill would remove the transaction threshold, leaving only the revenue
threshold as the determinant for sales tax collection obligations.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
 FE to S3604
2
OFFICE OF LEGISLATIVE SERVICES
The OLS is expected to result in annual decreases in State revenues by reducing the number of
remote sellers that are required to collect and remit the sales and use tax to the State. However,
the OLS is unable to quantify the anticipated reduction in State sales tax collections due to
significant data limitations. The necessary information regarding the number of remote sellers
collecting sales tax solely due to meeting the 200-transaction threshold, as well as their total tax
collections, is not available for analysis.
The fiscal impact of the bill would be limited to the foregone sales tax collections from remote
sellers who meet the current 200-transaction threshold but have gross revenue below $100,000.
Given that remote sellers with at least $100,000 in gross revenue from sales into the State would
continue to be required to collect and remit sales tax, each remote seller affected by this legislation
would result in a reduction of no more than $6,625 in annual sales tax collections, which represents
the maximum tax on $100,000 in taxable sales at the 6.625 percent rate. Additionally, since these
sellers must conduct at least 200 transactions while generating less than $100,000 in revenue, the
average per-transaction amounts are necessarily relatively small.
To provide context for the potential scale of impact, consider a hypothetical scenario where a
remote seller completes 210 transactions in the State, averaging $37.50 per transaction, thereby
generating approximately $500 in annual sales tax collections. If approximately 2,500 sellers meet
only the transaction threshold, the annual revenue loss could approximate $1.3 million. However,
the OLS emphasizes this scenario is purely illustrative, as the actual number of affected sellers and
their sales tax remittances could vary significantly.
Without comprehensive data on the distribution of remote sellers by transaction count, revenue
patterns, and current sales tax collections from affected sellers, the OLS is unable to quantify the
anticipated reduction in State revenue.
Section: Revenue, Finance, and Appropriations
Analyst: Patrick Walsh
Assistant Fiscal Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).


Statutes affected:
Introduced: 54:32B-3.5