On August 3, 2021, the New Jersey Division of Taxation released guidance on its website informing taxpayers that as of October 1, 2021, the state is ending its temporary waiver of certain corporation business tax (CBT) and sales tax nexus standards necessitated by the COVID-19 pandemic. The temporary guidance allowing employers to source wage income in accordance with an employer’s location will also end. Accordingly, employers generally should resume sourcing income based on where an employee’s service or employment is performed, subject to notable exceptions of any applicable convenience of the employer tests (such as the one adopted by New York State) or reciprocity agreements (such as the agreement in place with Pennsylvania).
The timing of this guidance is somewhat surprising, as in recent weeks a number of companies have pushed back office reopening dates because of concerns related to the COVID-19 Delta variant.
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