Category Archives:New Jersey

NJ Sales and Use Tax Relief for Tattooing and Cosmetic Makeup Services in Reconstructive Breast Surgery

toddThe New Jersey Assembly Budget Committee approved a bill, A-4526, that provides a sales tax exemption for permanent cosmetic make-up services provided in conjunction with reconstructive breast surgery.  The new law, known as “Jen’s Law” became effective on January 17, 2014. The law was named after Jennifer Dubrow Weiss of Vorhees, NJ who had a double mastectomy upon discovery of genes that lead to a high risk of cancer.

Under the old New Jersey tax law, procedures for permanent cosmetic make-up to create the appearance of a pre-mastectomy breast were subject to sales tax.  Many insurance companies had excluded sales tax from coverage for cosmetic services which caused large out of pocket costs for the insured.

Assembly woman Caroline Casagrande, who sponsored the bill, expressed the following in a press release:

“Women who are at a high risk for getting breast cancer often take preventative measures to reduce that risk. A mastectomy is an extremely traumatic event for a woman,” “In addition to the physical pain, the psychological effects are often devastating. Reconstructive surgery is often an important step in the healing process. Requiring women to pay out of pocket sales tax for ensuing cosmetic services is an additional burden they should not have to bear.”  She further stated that “During the final stages of breast reconstruction surgery, women often decide to use tattoos to create the appearance of a pre-mastectomy breast.”

On March 21, 2014, the NJ Division of Taxation issued a reminder that sellers of tattooing, permanent body art, or permanent cosmetic make-up application services should not charge a sales tax in connection with reconstructive breast surgery if the customer provides a doctor’s prescription to the seller. 

If you have been assessed with a sales tax on or after January 17, 2014, you should apply for a tax refund from either the service provider or the Division of Taxation.  New Jersey tax law requires that you file your claim for a refund on the Form A-3730 within four years from the date the sales tax was paid.

Continue Reading...

Tax Relief for NJ Businesses

dfGovernor Christie announced that tax relief will be provided for New Jersey businesses that suffered damage from the Seaside Heights and Seaside Park fire.

The tax relief allows NJ businesses to postpone the filing of the 3rd quarter sales and use tax returns, due on October 21, 2013, without a penalty. The tax relief announced is similar to the relief afforded to NJ taxpayers after Hurricane Sandy.

Todd S. Unger, Esq. is a tax attorney whose practice is devoted to assisting New Jersey residents with the resolution of state and federal tax issues.  If you have any questions regarding Governor Christie’s announcement of New Jersey tax relief, please contact the Law Offices of Todd S. Unger, Esq. today.

Continue Reading...

The New Jersey Division of Taxation takes a bite on Sales Tax

New Jersey Dog Sales TaxA New Jersey taxpayer requested a Letter Ruling regarding the New Jersey Sales and Use Tax Act in connection to dog sitting and dog training activities. Letter Ruling 2013-1-SUT is binding on the Division of Taxation and the taxpayer requesting guidance exclusively. Therefore, a Letter Ruling cannot be relied upon for precedent.

The taxpayer who requested guidance was a certified dog trainer that offered dog owners the following services: 1) instruction on how to properly handle their dogs; 2) dog sitting services; and 3) selling clients trained dogs that were purchased by the taxpayer. The taxpayer wanted to know if the foregoing services were subject to NJ Sales and Use Tax. 

Continue Reading...

Philadelphia and New Jersey Shoe Store Operator Sentenced for Tax Fraud Conspiracy

ssUri Jacobson, the Co-Owner of Bare Feet Shores, a retail clothing and shoe store in the NJ and Philadelphia region was sentenced on August 29, 2013 to 30 months in prison for a tax fraud conspiracy.

The tax fraud involved “under the table” payments to employees and filing false tax returns.  Elena Falaschetti, of Philadelphia, who was a store manager, was also indicted.  Falaschetti pleaded guilty to filing false personal income tax returns for the 2006 through 2009 tax years.  She had underreported income by approximately $121,000  Ms. Falaschetti was sentenced on May 20, 2013 to six months of home confinement. 

Continue Reading...

National Taxpayer Advocate Urges IRS Accountability Policies

The National Taxpayer Advocate raised a few eyebrows in Washington, DC recently when it suggested that the Internal Revenue Service make “apology payments.”

Nina Olson is the National Taxpayer Advocate and, as such she heads the Office of the Taxpayer Advocate, a government office dedicated to helping taxpayers solve their problems with the IRS. Twice a year, she is required to submit semi-annual reports to Congress. In her most recent report, she recommends that the IRS specifically allow her office to make “apology” payments of up to $1,000 to taxpayers where the action or inaction of the IRS causes excessive expense or undue burden, and the taxpayer experiences a “significant hardship.” 

Continue Reading...

Sales and Use Tax Exemption Tips for Hurricane Sandy Victims

gffIn post-Hurricane Sandy months, residents along the New Jersey coastline should be concentrating on important things such as family and putting their homes and lives back in order. The last thing they should be spending their time worrying about is sales and use tax.

New Jersey residents, however, may be able to take advantage of certain provisions in the state’s sales and use tax when it comes to being excused from paying taxes for tangible personal property and services associated with disaster recovery efforts. 

Continue Reading...

IRS Ends Tax Relief for Most New Jersey and New York Victims of Hurricane Sandy

gfThe IRS announced tax relief to individuals and business affected by Hurricane Sandy.  In IR 2013-16, the IRS announced that it was extending the Hurricane Sandy tax deadline relief until April 1, 2013 for Monmouth and Ocean counties NJ and Nassau, Queens, Richmond and Suffolk counties NY exclusively.  IR-2013-16 postponed various tax filing and payment deadlines from February 1, 2013 until April 1, 2013.

Continue Reading...

New Jersey Division of Taxation and Internal Revenue Service 2013 Interest Rates on Tax Underpayments

According to the New Jersey Division of Taxation Technical Bulletin TB-21, the rate of interest on underpayments of New Jersey taxes remains at 6.25% compounded annually for the 2013 calendar year.

Under the Taxpayers’ Bill of Rights, interest assessed on outstanding tax balances is the prime rate plus 3%; accordingly, the rate is calculated as follows: Prime Rate (3.25%) + 3% = 6.25%, compounded annually. This rate has remained constant since the 2009 tax year.

Continue Reading...

IRS Hardship Loans and Distribution Relief for Hurricane Sandy Victims

In order to the alleviate hardships of individuals affected by Hurricane Sandy, the IRS has announced that it will relax procedural and administrative rules that apply to retirement plan loans. The IRS is providing this relief in addition to the postponement of various tax filing and payment deadlines to FEMA-designated areas such as New Jersey, New York, and Connecticut. <!–more–>

To provide disaster relief, the IRS is minimizing the amount of red tape that eligible retirement plan participants would undergo in order to access their money.  The standard six-month ban on 401(k) and 403(b) contributions that would normally affect employees who take hardship loans will no longer apply.

Continue Reading...

IRS Provides Tax Relief to Victims of Hurricane Sandy

The IRS announced tax relief to individuals and business affected by Hurricane Sandy.

The IRS tax relief postponed various tax filing and payment deadlines.  Hurricane Sandy victims have until Feb. 1, 2013 to file all tax returns and pay any taxes due.  Tax payments and tax returns, include but are not limited to, fourth quarter individual estimated tax payment, payroll and excise tax returns and accompanying payments for the third and fourth quarters. Additionally, tax-exempt organizations required to file Form 990 series returns has been postponed.

Continue Reading...