Tax & Accounting Blog

New Jersey Issues Guidance on Sale of Digital Products

Indirect Tax, Sales and Use Tax August 3, 2011

The New Jersey Division of Taxation has issued written guidance (Publication ANJ-27) on the applicability of sales tax to the sale of specified digital products as well as to receipts from installing, maintaining, servicing or repairing specified digital products.

A specified digital product is an electronically transferred digital audio-visual work, digital audio work, or digital book.

The term specified digital product does not include video programming services, including video-on-demand television services; and broadcasting services, including content to provide such services.

Specified digital products are also subject to tax when delivered in tangible form (i.e., CD, DVD, audio/video tape).

Furthermore, specified digital products are subject to sales tax when the property is electronically delivered to the customer at an address in New Jersey. If the property is not received by the purchaser at the seller’s New Jersey business location or at the purchaser’s New Jersey location, the sale is subject to New Jersey sales tax if either the seller’s business records or the address provided by the purchaser during the sale indicate a New Jersey billing address.