As anticipated in our client alert, authored in part by my colleague Allie Carlson, New Jersey legislation has been proposed providing broad affiliate nexus provisions.[1]  In the bulk of the provisions expanding the definition of a New Jersey seller, an ownership interest in an in-state entity is prerequisite to finding nexus.  This is defined as either a substantial ownership interest, at least 10%, or affiliation, generally in excess of 50%.  Ownership is coupled with a variety of additional factors similar to legislation enacted in other states to provide what is commonly referred to as “ownership plus” nexus.  As the target of much of the remote seller legislation, Amazon will likely fall within the ambit of the proposed legislation, however, this is true even without a traditional click-through provision due to Amazon’s acquisition of Quidsi, Inc., an online retailer headquartered in New Jersey.

The proposed legislation does not include a traditional click-through provision; however, the grant of broad discretionary authority to the Division regarding joint liability between a remote seller and agent serves a similar purpose.  An expansive reading of this authority may result in assessments against persons with an in-state presence where such persons solicited business for a remote seller even though the in-state person was not the actual seller in the transaction.  There is also no minimum receipts requirement nor presumption language to defeat nexus.

 It will be interesting to see how the New Jersey legislature proceeds with what many critics are calling overly broad nexus provisions.


[1] Senate Bill 905, Introduced by Senator Raymond J. Lesniak.