The New Jersey Division of Taxation recently ruled that services associated with the preparation and delivery of human tissue are not taxable.
The taxpayer was a non-transplantable tissue bank that received donated human bodies. The taxpayer provided services associated with processing, storing, preparing, and delivering human tissue specimens to clients for use in medical research and training.
New Jersey taxes designated services, which include the processing, servicing, repairing, and storing of tangible personal property. However, New Jersey does not consider human tissue to be tangible personal property. Because the taxpayer's services are not associated with tangible personal property, they are not subject to sales tax.