Current through Register Vol. 56, No. 18, September 16, 2024
(a) Cost of collection
means the amount of expense incurred by the State with respect to the issuance of a
certificate of debt for, and the collection of, any State tax not paid within the
time prescribed by law. These expenses include, but are not limited to, the
following:
1. Cost of postage;
2. Cost of telephone;
3. Cost of photocopying;
4. State payroll hours used, including all
associated overhead;
5. Cost of filing
and prosecuting suit;
6. The cost of
agents, contractors, subcontractors or others employed or otherwise engaged by the
State of New Jersey subsequent to the entry of a certificate of debt for the
efficient and expeditious collection of unpaid tax; and
7. Any other expense deemed by the Director to be
reasonably related and necessary for the collection of any unpaid tax.
(b) The Director may impose the actual
cost of collection, or, in lieu of ascertaining and imposing the actual cost of
collection, can impose a fee as follows:
1. In the
event that any State tax is not paid within the time prescribed by law and the
Director issues a certificate of debt pursuant to
54:49-12, the greater of five percent
of the tax or $ 100.00;
2. In the event
that any State tax remains unpaid following the issuance of the certificate of debt
and the Director takes any further collection action, including but not limited to,
referral of the matter to the Attorney General, the greater of 10 percent of the tax
or $ 200.00;
3. In the event that any
State tax remains unpaid and suit is instituted against the taxpayer for collection
of the tax, the greater of 20 percent of the tax or $ 500.00.
(c) The Director shall consider the following in
determining whether to impose the actual cost of collection or a fee in lieu
thereof:
1. Whether the taxpayer fails to properly
maintain books and records as required;
2. Whether the taxpayer fails to make books and
records available for examination;
3.
Whether the taxpayer fails to secure proper license or fails to register with the
Division of Taxation as required;
4.
Whether the taxpayer operates under a voided corporate charter or after the
revocation of authority to do business in New Jersey;
5. Whether the taxpayer remits payment which
subsequently became dishonored or defaults on a bond or other security posted with
the Division or on a Deferred Payment Plan;
6. Whether the Director finds that a taxpayer
intends to leave this State, or to remove therefrom possessions, or any property
subject to any State tax; or that taxpayer does any other act tending to prejudice,
delay or negate proceedings to assess, collect, or pay any State tax;
7. Whether the taxpayer fails to collect, or
truthfully account for, or file a return or file any other information as
required;
8. Whether the taxpayer's
non-compliance induces the Division of Taxation to issue a Warrant for
Execution.
(d) In the event
that any State tax remains unpaid and the Director refers a taxpayer's account to a
private person, company, association, or corporation providing debt collection
services prior to the entry of a certificate of debt, the Director may impose a
referral cost recovery fee as follows:
1. In the
amount of 10 percent of the amount referred for collection to the private debt
collection service; or
2. If the
contract for the private debt collection service has been publicly bid pursuant to
52:34-6 et seq., and the contract
provides that the compensation to be paid by the State to the provider of private
debt collection services is a specified percentage of the debt collected or to be
collected, the referral cost recovery fee is equal to the percentage specified in
the contract.
(e) In the
event that the Director imposes an arbitrary assessment pursuant to
54:49-5 or 7, a fee for the cost of
collection of 10 percent of the tax assessed, or $ 200.00, whichever is greater,
will be imposed on that arbitrary assessment.
(f) Any fees imposed as cost of collection, or in
lieu thereof, or as a referral cost recovery fee are in addition to any interest,
penalties, or both, otherwise provided by law, and are payable to and recoverable by
the Director, along with all penalties and interest, as if they were part of the tax
imposed.
(g) Interest or penalties will
not be assessed against any fees imposed as cost of collection, or in lieu thereof,
or as a referral cost recovery fee; however, the cost of collection may reflect the
passage of time between the date the costs were incurred and the date the costs are
paid.
(h) For the purposes of
calculating the percentage of the tax to be imposed in lieu of a fixed fee or the
actual cost of collection, "tax" means the sum of the unpaid tax, penalties, and
interest.
