NJ Politics Digest: Gov. Murphy Raises Taxes on Internet Shoppers

The law comes after a U.S. Supreme Court ruling in June cleared the way for states to expand internet taxes.

Phil Murphy
New Jersey Gov. Phil Murphy. Flickr/Phil Murphy for Governor

On Thursday, Gov. Phil Murphy signed a law extending the state sales tax to online sellers who don’t have a presence in the Garden State, adding an estimated $188 million annually to the state’s already crushing tax burden.

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Murphy failed in his attempts to raise the state’s regular sales tax earlier this year—a hike he maintained that residents would barely notice.

Supporters of the measure say it’s only fair, since the state already taxes sales at brick-and-mortar merchants. The law comes after a U.S. Supreme Court ruling in June cleared the way for states to expand internet taxes.

Under the new law, retailers without a physical presence in the state must collect sales taxes if they sell more than $100,000 of merchandise to local residents or do more than 200 separate transactions. The law also sets a lower threshold for sites such as Ebay, which process a lot of transactions for sellers who might not meet the higher criteria.

Earlier this month, the Murphy administration hiked the state gas tax by 4.3 cents per gallon, an increase of more than 10 percent, bringing the overall state tax to 41.4 cents per gallon—a large part of the state’s average charge of $2.895 for a gallon of gas. The administration also started collecting new taxes on e-cigarettes and rooms booked through online booking sites around the start of the month. That’s in addition to the tax on ride-sharing services the administration implemented.

While New Jersey has one of the nation’s highest tax burdens, Murphy has maintained that residents won’t mind paying even more if they feel they are getting their money’s worth.

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NJ Politics Digest: Gov. Murphy Raises Taxes on Internet Shoppers