S4219

An Act concerning administration of employer payroll tax and amending P.L.1970, c.326.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 16 of P.L.1970, c.326 (C.40:48C-16) is amended to read as follows:

16. Any ordinance adopted pursuant to this article shall:

a. Require each employer to report his payroll for the preceding calendar quarter to an officer of the municipality designated therein to receive the same and to collect the tax together with such other related information as shall be required by the ordinance and regulations issued pursuant thereto;

b. Require the report and payment of the tax imposed for the preceding calendar quarter on or before the last day of April, July, October and January, respectively;

c. Provide methods for enforcement of, and for the imposition of penalties for failure to report and pay, the tax imposed;

d. Provide a procedure for claims for refunds, and repayment of overpayment of taxes;

e. Prohibit any employer from deducting or withholding any amount from remuneration payable to an employee on account of the tax imposed by the ordinance;

f. Provide that information contained in any employer's report or received by the municipality or any of its officers or employees as a result of any investigation, hearing or verification of a report shall be confidential except for official purposes and shall not be disclosed except in accordance with an order of court or as otherwise provided by law.

g. Require certain employers to provide additional information to assist in the administration of the local tax, as requested by the municipality.

Any ordinance adopted pursuant to this article (C.40:48C-14 through 40:48C-19) also may require the payment of interest by an employer on delinquent payroll taxes. Payroll taxes shall be considered delinquent when the amount due to the municipality is not paid by the employer on or before the dates specified in subsection b. of this section. Any ordinance so adopted may fix the rate of interest to be charged on the delinquent payroll taxes; however, the rate so fixed shall not exceed 8% per annum on the first $1,500 of the delinquency and 18% per annum on any amount in excess of $1,500, to be calculated from the date the tax was payable until the date that actual payment to the municipality is made.

(cf: P.L.2007, c.294, s.1)

2. Section 18 of P.L.1970, c.326 (C.40:48C-18) is amended to read as follows:

a. No employer shall be obligated to report and pay an employer payroll tax, or any interest, penalty or costs with respect thereto, to more than one municipality with respect to remuneration paid to an employee for services performed. Where any dispute as to the liability for an employer payroll tax to more than one municipality for services performed by an employee is not resolved by agreement between the employer and the municipalities, all of said municipalities shall be joined in a proceeding in the tax court to collect the tax alleged to be due.

b. If an out-of-State municipality or other out-of-State state or out-of-State local entity imposes an employer payroll tax on any employee with respect to remuneration paid to an employee for service performed out-of-State, an employer payroll tax imposed pursuant to section 15 of P.L.1970, c.326 (C.40:48C-15) shall not apply to that employee. In such case, the employer shall submit documentation in a manner prescribed by Division of Local Government Services in the Department of Community Affairs regarding the employee’s residency status, the location and description of services performed out-of-State, and the applicable out-of-State employer payroll tax, to the taxing municipality before any employer payroll tax obligation, imposed pursuant to section 15 of P.L.1970, c.326 (C.40:48C-15), shall be waived.

(cf: P.L.1983, c.36, s.4)

3. This act shall take effect immediately.

STATEMENT

This bill amends the local payroll tax law to require certain employers, which employ persons within any municipality that imposes a local payroll tax, to provide additional information to assist in the administration of the local tax, as requested by the municipality collecting the tax. The bill further provides that if an out-of-State municipality, or other out-of-State entity, imposes an employer payroll tax on a New Jersey resident employee, an employer payroll tax imposed pursuant to section 15 of P.L.1970, c.326 (C.40:48C-15) would not apply to that employee. The bill also establishes a reporting mechanism by which employers and municipalities may address multiple taxation concerns regarding out-of-State resident employees.