(a) A regular place
of business is any bona fide office (other than a statutory office), factory,
warehouse, or other space of the taxpayer which is regularly maintained,
occupied and used by the taxpayer in carrying on its business and in which one
or more regular employees are in attendance. The following factors will assist
in the determination of what is a regular place of business.
1. Bona fide office: An office in which an
employee in attendance performs significant duties related to the business of
the taxpayer. An office in name only, space of the taxpayer or any place where
an employee does not actually perform significant duties constituting part of
taxpayer's business does not constitute a regular place of business.
2. Space of the taxpayer: The taxpayer must
be directly responsible for the expenses incurred in maintaining the regular
place of business and must either own or rent the facility in its own name and
not through a related person or entity. The regular place of business should be
identifiable as belonging to the taxpayer by, for example, reflecting the
taxpayer's name on the exterior and interior of the building and being listed
in the taxpayer's name in a telephone book.
3. Regularly maintained, occupied and used by
the taxpayer in carrying on its business: The taxpayer must regularly maintain,
occupy and use the premises by employing one or more regular employees who are
in attendance during normal working hours. Premises are not regularly
maintained, occupied and used in the event employees are in attendance only on
a part time basis and, in their absence, telephone messages are received by an
answering service or recording device.
4. Regular employee: A regular employee must
be under the control and direction of the taxpayer in transacting the
taxpayer's business and/or performing work on behalf of the taxpayer. The
officers of the taxpayer are generally deemed to be regular employees of the
taxpayer while independent contractors and members of the taxpayer's board of
directors are not regular employees of the taxpayer. The method or procedure by
which a taxpayer reports the compensation paid to an individual (such as a W-2
form) shall not be conclusive as to whether the individual is a regular
employee (See
N.J.A.C.
18:7-8.14.):
i. The facilities of a public warehouse
located outside New Jersey and utilized to store property of the taxpayer prior
to shipment to customers shall not constitute a regular place of business of
the taxpayer where the warehouse is not the space of the taxpayer.
ii. The facilities of an independent
contractor located outside of New Jersey and used to store, convert, process,
finish and/or improve the goods of the taxpayer prior to shipment to customers
shall not constitute a regular place of business of the taxpayer.
iii. A job site, field office or other
facility which is not regularly maintained, occupied and used in taxpayer's
business or where administrative duties, such as performing payroll functions,
telephoning, recordkeeping, banking, accounting, the hiring and firing of
employees and similar functions are not performed, is not a regular place of
business.
iv. The location of
inventories outside New Jersey in the possession of employees in their homes,
or in trucks, or in coin-operated machines do not represent space regularly
maintained, occupied and used by the taxpayer in carrying on its
business.
v. In the event that the
taxpayer's business is conducted by an independent agent or independent
contractor, the place of business of the independent agent or independent
contractor shall not be considered a regular place of business of the taxpayer.
In addition, any employee of such independent agent or independent contractor
shall not be considered a regular employee of the taxpayer.
