S2277

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

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

1. (New section) a. Receipts from the retail sales of the following 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) baby wash or soap, baby shampoos, baby lotions, and baby powders;

(2) child restraint systems;

(3) cribs;

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

(5) 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 sleeping enclosure designed to accommodate an infant or young child, including bassinets and toddler beds.

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

2. 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) sunscreen.

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, or 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.

"Sunscreen" means a lotion, cream, spray, or gel regulated by the federal Food and Drug Administration that is primarily used for purposes of absorbing, reflecting, or scattering ultraviolet radiation and preventing sunburn or any sun-related skin damage. Sunscreen does not include products marketed or intended for use as cosmetics or otherwise intended to be applied for cleansing, beautifying, promoting attractiveness, or altering appearance.

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)

3. This act shall take effect immediately, and shall apply to retail sales made on or after October 1, 2025.

STATEMENT

This bill provides sales and use tax exemptions for the sales of certain baby products and sunscreen.

The exemption provided for baby products would include baby wash or soap, baby shampoos, baby lotions, and baby powders; child restraint systems; cribs; nursing bottles, nipples, and funnels; and strollers. A “child restraint system” is defined under the bill to mean 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. The bill also defines a “crib” as a bed or sleeping enclosure designed to accommodate an infant or young child including bassinets and toddler beds. In addition, the bill further defines a “stroller” as a non-motorized, wheeled vehicle designed to push or otherwise transport an infant or young child including, but not limited to, a carriage, folding-type umbrella stroller, or full-size stroller.

The bill also provides a sales and use tax exemption for the sales of sunscreen. “Sunscreen” is defined under the bill to mean a lotion, cream, spray, or gel regulated by the federal Food and Drug Administration that is primarily used for purposes of absorbing, reflecting, or scattering ultraviolet radiation and preventing sunburn or any sun-related skin damage. The definition of sunscreen would not, however, include products marketed or intended for use as cosmetics or otherwise intended to be applied for cleansing, beautifying, promoting attractiveness, or altering appearance.