S4580

An Act concerning exemptions from the sales and use tax, amending P.L.1980, c.105, and supplementing P.L.1966, c.30 (C.54:32B-1 et seq.).

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

1. Section 13 of P.L.1980, c.105 (C.54:32B-8.1) is amended to read as follows:

13. a. Receipts from sales of the following sold for human use are exempt from the tax imposed under the "Sales and Use Tax Act":

(1) drugs sold pursuant to a doctor's prescription;

(2) over-the-counter drugs;

(3) diabetic supplies;

(4) prosthetic devices;

(5) tampons or like products;

(6) medical oxygen;

(7) human blood and its derivatives;

(8) durable medical equipment for home use;

(9) mobility enhancing equipment sold by prescription; [and]

(10) repair and replacement parts for any of the foregoing exempt devices and equipment; and

(11) grooming and hygiene products.

b. As used in this section:

"Drug" means a compound, substance, or preparation, and any component of a compound, substance, or preparation, other than food and food ingredients, dietary supplements, or alcoholic beverages:

(1) recognized in the official United States Pharmacopoeia, official Homeopathic Pharmacopoeia of the United States, or official National Formulary, and supplement to any of them; or

(2) intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease; or

(3) intended to affect the structure or any function of the body.

"Over-the-counter-drug" means a drug that contains a label which identifies the product as a drug, required by 21 CFR 201.66. The label includes:

(1) a "Drug Facts" panel or

(2) a statement of the "active ingredient" or "active ingredients" with a list of those ingredients contained in the compound, substance or preparation. "Over-the-counter drug" does not include a grooming and hygiene product.

"Grooming and hygiene product" is soap or cleaning solution, shampoo, toothpaste, mouthwash, anti-perspirant, or sun tan lotion or screen, regardless of whether the item meets the definition of "over-the-counter drug."

"Prescription" means an order, formula, or recipe issued in any form of oral, written, electronic, or other means of transmission by a duly licensed practitioner authorized by the laws of this State.

"Prosthetic device" means a replacement, corrective, or supportive device including repair and replacement parts for same worn on or in the body in order to:

(1) artificially replace a missing portion of the body; or

(2) prevent or correct a physical disability; or

(3) support a weak or disabled portion of the body.

"Durable medical equipment" means equipment, including repair and replacement parts, but not including mobility enhancing equipment, that:

(1) can withstand repeated use;

(2) is primarily and customarily used to serve a medical purpose;

(3) is generally not useful to a person in the absence of illness or injury; and

(4) is not worn in or on the body.

"Mobility enhancing equipment" means equipment, including repair and replacement parts, other than durable medical equipment, that:

(1) is primarily and customarily used to provide or increase the ability to move from one place to another and which is appropriate for use either at home or in a motor vehicle; and

(2) is not generally used by persons with typical mobility; and

(3) does not include any motor vehicle or equipment on a motor vehicle normally provided by a motor vehicle manufacturer.

c. Receipts from sales of supplies purchased for use in providing medical services for compensation, but not transferred to the purchaser of the service in conjunction with the performance of the service, shall be considered taxable receipts from retail sales notwithstanding the exemption from the tax imposed under the "Sales and Use Tax Act" provided under this section.

(cf: P.L.2017, c.131, s.214)

2. (New section) a. Receipts from sales of the following baby products shall be exempt from the tax imposed under the “Sales and Use Tax Act,” P.L.1966, c.30 (C.54:32B-1 et seq.):

(1) child restraint systems;

(2) cribs;

(3) nursing bottles, nipples, and funnels; and

(4) strollers.

b. As used in this section:

"Child restraint system" means any device that is designed to protect, hold, or restrain an infant or young child while riding in a motor vehicle to prevent or minimize injury, and conforms with federal motor vehicle safety standards.

"Crib" means a bed or containment designed to accommodate an infant.

"Stroller" means a non-motorized, wheeled vehicle designed to push or otherwise transport a young child including, but not limited to, a carriage, folding-type umbrella stroller, or full-size stroller.

3. This act shall take effect immediately and apply to receipts received from sales made on or after the first day of the second month following the date of enactment.

STATEMENT

This bill provides sales and use tax exemptions for the sales of grooming and hygiene products, as well as the sales of certain baby products.

Under current law, receipts from the sales of grooming and hygiene products designed for human use are subject to sales and use tax. A “grooming and hygiene product” would qualify for the sales and use tax exemption provided under the bill if the product is soap or cleaning solution, shampoo, toothpaste, mouthwash, anti-perspirant, or sun tan lotion or screen, regardless of whether the item is an "over-the-counter drug" under State law.

The bill also provides a sales and use tax exemption for select baby products, namely: child restraint systems; cribs; nursing bottles, nipples, and funnels; and strollers. The bill defines a “child restraint system” as any device that is designed to protect, hold, or restrain an infant or young child while riding in a motor vehicle to prevent or minimize injury, and conforms with federal motor vehicle safety standards. A “crib” is defined under the bill as a bed or containment designed to accommodate an infant. Finally, the bill defines a “stroller” as a non-motorized, wheeled vehicle designed to push or otherwise transport a young child including, but not limited to, a carriage, folding-type umbrella stroller, or full-size stroller.