NJ Wants Online Sellers’ Case Over Income Tax Expansion Tossed

New Jersey didn’t exceed its authority under federal law when it expanded income tax obligations to out-of-state online merchants, the state attorney general told the tax court.

The state is asking the New Jersey Tax Court to toss the American Catalog Mailers Association’s challenge to the internet activities amendments that the state enacted last year. The association argues that the rule runs afoul of Public Law 86-272, a federal statute that prohibits states from imposing income taxes on out-of-state businesses that only solicit sales of tangible personal property in the state.

The ACMA has actively pursued every state that has ...