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Press Release NJAR® Seeks Legislative Action to Rectify Bulk Sales Notice Requirements Listening to the concerns of our membership, NJAR® is diligently working on a legislative remedy to the recent interpretation by the New Jersey Division of Taxation on the Bulk Sales Act. We are developing legislation that would exempt many properties from having to fulfill notification requirements under the law. By way of background, on July 3, 2008, the New Jersey Division of Taxation issued a Technical Bulletin stating that these Bulk Sales notice requirements apply to the sale of real estate if the primary use of the real estate is to support a business on its premises. The Technical Bulletin stated that the seller must submit an Asset Transfer Tax Declaration to the Division of Taxation in order to assist the Division of Taxation in estimating the amount of the claim for state taxes. View the Technical Bulletin (including the Asset Transfer Tax Declaration). In response to informal inquiries that have been made, the New Jersey Division of Taxation recently stated that real estate transactions in New Jersey are now subject to Bulk Sales notice requirements if the property generates any income, which would include renting the property for any period of time. This does not apply to the sale of an owner-occupied single family home or a sale of real estate in the ordinary course of the seller’s business. Purchasers must notify the Division of Taxation at least 10 days prior to taking possession of the property. The Division will notify the purchaser within 10 days of receipt if it has a claim against the seller for taxes and the amount of the claim. If the purchaser fails to comply, then the purchaser will be personally liable for any tax owed by the seller to the state. The forms for the purchaser to file are available here. In addition to contacting the New Jersey Division of Taxation to clarify current notice requirements, NJAR® is also assisting legislators to craft a bill that will exempt certain properties from the notification rules. Assemblyman Patrick Diegnan (D-18) and Senator Jeff Van Drew (D-1) will introduce legislation that explicitly exempts single family homes, seasonal rental properties, co-ops and time shares from Bulk Sales notice requirements. At the urging of NJAR®, the lawmakers will immediately introduce the measure when the full state Legislature reconvenes in May. The bill is a priority for NJAR® and we are pushing hard for it to be enacted before the Legislature goes on summer recess. Please stay tuned to www.njar.com and the Week in Review e-mail newsletter for any developments on this legislation. For more information on the Bulk Sales notification requirements, you can also visit our webpage. web: www.njar.com |
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