PBA Gets Clarification
on New Jersey Tax Law

Lawmakers in New Jersey recently increased the state sales tax on a range of retail merchandise and services as part of an overall tax package proposed Governor Jon Corzine. The tax package also created a new 7% sales tax for "massage, bodywork, and somatic services."

Even before the new sales tax took effect in October, there was some confusion over how broadly New Jersey's tax department was defining "massage, bodywork, and somatic services." "The new tax language was really broad, so we just weren't sure if it would affect other services like manicures, pedicures or facials," said PBA member David Clark of The Village Salon in Pennington, NJ. David was one of several salon owners who contacted New Jersey;s Division of Taxation seeking clarification. Unfortunately, they received conflicting advice and no clear answer.

Several calls and emails came into the PBA office from member salons requesting assistance. After researching the issue, PBA contacted the New Jersey tax office to advocate that the new tax was only applicable to massage services and shouldn't apply to services such as manicures, pedicures and facials. Moreover, PBA asked the tax department to provide clear and consistent guidance for our salon and spa members. Recognizing that the new law was only days away from taking effect, PBA asked for an expedited interpretation of the new rules.

The New Jersey Division of Taxation responded to our request and provided a favorable interpretation of the new law. PBA immediately reached out to our members in New Jersey to inform them that the new tax indeed would not apply to non-massage services.

"Having PBA there to advocate for salons here in New Jersey was a big relief," said PBA member Ed Simon of Mystique Hair & Skin in Princeton, NJ. "It's comforting to know that there are experts on staff at PBA to turn to when issues like this arise."