Reed Smith Client Alerts

On November 16, 2017, the Tax Court of New Jersey issued a ruling in Spirit Halloween Superstores, Inc. v. Director, Division of Taxation,1 concerning the sourcing of sales of tangible personal property for sales tax purposes. The ruling also provides guidance on the evidentiary standards for obtaining a sales tax refund.

The Tax Court of New Jersey’s decision in Spirit Halloween Superstores serves as an important reminder to taxpayers that evidence, such as affidavits, submitted to the court in support of a claim must meet the court’s evidentiary standards or it will be disregarded.

On a brighter note, the decision confirms that a sale is not necessarily a sale sourced to New Jersey for sales tax purposes just because the invoice has a New Jersey “ship-to” address and title transfers to the purchaser in New Jersey at the location of a common carrier.