N.J. Admin. Code § 18:24-27.3

Current through Register Vol. 56, No. 8, April 15, 2024

Section 18:24-27.3 - Transportation services provided by limousine operators

(a) Charges for transportation services provided by a limousine operator and both originating and ending within New Jersey are subject to sales tax.

(b) "Limousine operator" means a person who provides prearranged passenger transportation, for consideration, not on a scheduled, regular route, and not in connection with mortuary and funeral services.

(c) A "limousine" is a motor vehicle that satisfies the following criteria:

1. Is registered pursuant to 39:3-19.5 or registered as a limousine under the laws of another state or of the United States;

2. Is used exclusively in the business of carrying passengers for hire to provide prearranged passenger transportation at a premium fare on a nonscheduled basis that is not conducted on a regular route;

3. Has a seating capacity not exceeding 14 passengers;

4. Has a seating capacity (including driver) that is not more than five persons in excess of the seating capacity at the time of manufacture; and

5. Does not include taxicabs, hotel shuttles or buses, airport shuttles or buses, buses employed solely in transporting schoolchildren or teachers to and from school, or vehicles owned and operated by a business for its own purposes without either charge to passengers or remuneration to the business, or vehicles engaged exclusively in providing ambulance services or handicapped transport.

(d) Receipts for transportation services include the charge for physically transporting a passenger or passengers, as well as any charges that may be itemized for amenities, individualized services, and components of the limousine operator's overhead, which are billed to the purchaser of the transportation service.

1. Additional amounts charged, beyond the base rate, for services, amenities, and expenses, such as the following, are treated as part of the receipt for the transportation service and, therefore, subject to sales tax payable by the purchaser of the transportation service:

i. Waiting time;

ii. Meeting and greeting;

iii. Transporting luggage or packages with the passengers;

iv. Transporting pets with the passengers;

v. Making extra stops;

vi. Reimbursement of expenses incurred incidental to providing the transportation service, such as tolls and parking charges;

vii. Providing refreshments, flowers, or other amenities purchased by the operator; and

viii. Providing access to in-vehicle television, telephone, Internet service, or videos.

2. Tips are treated according to the following rules:

i. Tips that are voluntarily given by the purchaser of the transportation service to the limousine driver are not subject to sales tax;

ii. Gratuities that are billed to the purchaser are not taxable if they are separately stated on the bill or invoice for the transportation and designated as a "gratuity" or "tip" and are paid over in their entirety to the driver; and

iii. Gratuities that are billed to the purchaser are treated as part of the taxable receipt for transportation services if they are not paid in their entirety to the driver.

3. The following are not deemed to be receipts for transportation services provided by a limousine operator and, therefore, are not subject to sales tax:

i. Cancellation and no-show charges; and

ii. The transportation of tangible personal property, including packages, pets, medical supplies, and human organs when not accompanied by a human passenger.

(e) "Services originating in New Jersey" means services in which the trip begins with pick-up of the passenger or passengers in New Jersey. The location from which the limousine is dispatched, the office location of the limousine operator, and the purchaser's billing address are all irrelevant to the determination of where the service originates.

Example 1: The passenger is picked up by a limousine in Hackensack, New Jersey, and dropped off at the airport in Newark, New Jersey. The limousine operator itemizes extra charges for luggage and for parkway tolls.

The charges are taxable because the service begins and ends in New Jersey. The extra charges for luggage and tolls are treated as part of the transportation service and therefore are taxed as well.

Example 2: The passenger is picked up by limousine in Red Bank, New Jersey, and dropped off at J.F. Kennedy Airport in New York.

The charges are not taxable because the service ends outside New Jersey.

Example 3: A passenger is picked up in Washington, D.C., and taken to Montclair, New Jersey.

The charges are not taxable because the service originates outside New Jersey.

Example 4: A passenger contracts with a limousine operator to provide him with round trip service from his home to a meeting in Pennsylvania and back. The passenger is picked up in Cherry Hill, New Jersey in the morning and taken to a location in Philadelphia, Pennsylvania. Then, several hours later, the passenger is taken back home to Cherry Hill, New Jersey.

The services provided are not taxable. The morning service is not taxable because it ends outside New Jersey, and the afternoon service is not taxable because it originates outside New Jersey.

Example 5: Three tourists staying in Morristown, New Jersey, plan a group trip to visit Ellis Island and the Statute of Liberty in New York City. They arrange for a limousine operator to take them from Morristown to the Jersey City, New Jersey ferry terminal in the morning and then to pick them up in New York City in the evening and take them back to Morristown. They are charged extra for 20 minutes of waiting time in the morning in Morristown and for an hour of waiting time in New York City.

They are charged for two transportation services provided by a limousine operator. The service from Morristown to Jersey City, including the charge for 20 minutes of waiting time in Morristown, is taxable, because the service both originates and ends in New Jersey. The service from New York City back to Morristown, including the waiting time in New York City, is not taxable, because that service originates outside New Jersey.

Example 6: Pursuant to a reservation made in advance, a passenger is taken by limousine from Matawan, New Jersey to J.F. Kennedy Airport, New York and is then picked up at the same airport and returned to Matawan a week later.

The charges are not taxable because the first service ends outside New Jersey and the second service originates outside New Jersey.

Example 7: A family of five arranges for limousine transportation from their home in Stockton, New Jersey. On the way they arrange to stop briefly to get a package awaiting pick-up in New Hope, Pennsylvania and then they proceed to their destination in Cape May, New Jersey.

The charges are not taxable, because the trip does not take place entirely in New Jersey, since it includes a requested stop in Pennsylvania.

Example 8: A purchaser decides to hire a limousine to take her from her home in Cherry Hill, New Jersey to a hospital in Camden, New Jersey where she will be having surgery.

The charges are taxable because the trip begins and ends in New Jersey.

Example 9: A family in Belle Mead, New Jersey arranges for a limousine service to drive their son to and from his private school in Lawrenceville, New Jersey.

The charges are taxable because the rides begin and end in New Jersey.

N.J. Admin. Code § 18:24-27.3

Amended by 48 N.J.R. 824(a), effective 5/16/2016