NEW JERSEY DIVISION OF TAXATION
STUDYING THE IMPACT OF DIGITAL ECONOMY
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BSPPP Digital Economy Report for Division of Taxation
Table of Contents
Section Printed Page #
I. Introduction and Overview
2
II. Findings and Recommendations
3
III. Research Process
11
IV. Underlying Observations about the Digital Economy
11
V. What We Know About the Digital Economy
12
VI. The Challenges of the Digital Economy
13
VII. Analysis of the Impact on Specific New Jersey Taxes
14
VIII. Tax Equity Analysis
16
Appendix Table 1 BEA Summary of Digital Economy Components
pg. 2
I. Introduction and Overview
This Report is a starting point for the S Legislative and Executive branches to consider the
challenges to State tax policy presented by the digital economy. It provides a basic and general
understanding of the digital economy, its impact on state policy, and suggests recommendations for
follow-up actions.
The FY2022 State Budget included language requiring the Division of Taxation to undertake an
The Division asked
the Bloustein School of Planning and Public Policy to develop and undertake the study.
The research looks at the topics of the digital economy and tax policy from an expansive view, and
the Report reflects findings from the research
This research will provide policymakers a better grasp of the range of the challenges and
options involved. Where practical and useful, the Report includes web-links to references in lieu of
formal footnotes.
The digital economy as it relates to economic development is not part of this study. That
includes business tax credit programs and economic/business and job development policies.
pg. 3
II. Findings and Recommendations
followed by some detailed recommendations
relevant to particular taxes or areas of the digital economy.
Findings: Defining the Digital Economy
The digital economy is defined as:
o An economy that is based on digital computing technologies, but is often perceived as
conducting business through markets based on the internet and World Wide Web. (Bukht,
Rumana; Heeks, Richard (3 August 2017). "Defining, Conceptualising and Measuring the
Digital Economy").
o The economic activity that results from billions of everyday online connections among
people, businesses, devices, data, and processes. (Deloitte)
o The worldwide network of economic activities, commercial transactions and professional
interactions that are enabled by information and communications technologies. (Tech
Target)
o The infographic on page 9 provides a sense of the economic size of the digital economy in
the US.
Digital technology is technology that:
o relies on the use of microprocessors (tiny computers on an electronic chip) that process,
; and
o results in information, communications, and operations technologies
things") that now infuses every sector of the economy.
Findings: Current Taxation of the Digital Economy in New Jersey
Historically, Sales Tax policy has been can be
touched, seen, etc.). Intangible goods are not taxed. However, effective October 1, 2006, the Sales and
ringtones, movies, books, audio and video works, and similar products, where the customer was granted
a right or license to use, retain or make a copy of such item. N.J.S.A. 54:32B-2(vv); N.J.S.A. 54:32B-3(a).
In 2011, New Jersey adopted additional definitions, which included replacing the term
with the term A leading-
transferred digital audio- Sales Tax (as long
as they were not merely accessed).
There is a large gap in tax policies, particularly with digital services. If, for example, New Jersey were to
consider applying the Sales Tax on more broadly defined digital goods and services, additional issues
must be addressed related to exemptions, nexus (the level of connection between a taxing jurisdiction
and a business entity), and sourcing (the location where the tax applies). Because digital is different and
ever evolving, there are still questions that need to be resolved because of the myriad of locations that
involve digital products.
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Recommendations/Observations
We divide our recommendations and observations into two groups:
The first group pertains to issues surrounding policies with
regard to the digital economy;
The second group of recommendations cover the administrative and institutional capacities
required to address those issues.
A. Tax Policy
I. Sales and Use Tax: Address the challenge of placing digital products (goods and services)
exemptions, and enumerated services. This could be accomplished by following the state
ad from 2008, but re-examined with a model that classifies economic
transactions into two domains:
1. Physical Products:
a. Tangible and intangible goods (current model: tangible goods are taxable, subject
to exemptions; intangible goods are not taxable).
b. Human Services Services that are primarily the result of human effort performed
in response to a customer request. These include hybrid services where the human
is doing intellectual work at the end of the transaction but may be supported by
technology (a true object-like test based on who is doing the real work is
warranted). Taxable if enumerated.
2. Digital Products:
a. Digital goods and services. With an appropriate broad definition of digital, both
goods and services would be taxable by default, supported by common definitions,
subject to state-by-state exemptions to ensure ITFA compliance with the physical
domain and state-based public policy decisions.
b. Digital services are differentiated by human labor/expertise not being principally
engaged in providing the output received by the buyer; with a digital service, the
true object test is driven by the technology doing the work, rather than human
labor.
Changes to existing tax regimes must be carefully and deliberately considered and include
regular consultation with the business community and consistency with national
standards.
II. Table 1 (at the end of this Report) presents the composition of the digital economy by
category of product and service as defined by the U.S. Bureau of Economic Analysis (BEA).
Rutgers has also expanded this definition to incorporate some more recent, important
developments in this area of the economy. Below we briefly summarize our observations
and recommendations in regard to the taxation of goods and services in several of these
categories.
1. Computer Hardware. Hardware is part of the digital infrastructure that allows the
digital economy to exist. New Jersey is consistent with most states in its default taxation
pg. 5
of hardware as tangible property. Most hardware, including newer types of
communications equipment are taxed under the Sales and Use Tax Act, with a few
specific industry-based exemptions, most notably, an exemption for telecomm
equipment used by a service provider subject to regulation by the BPU or the FCC.
2. Software. New Jersey currently taxes prewritten software, regardless of the method
of delivery but does not tax Software as a Service (SaaS). New Jersey should review its
software tax policies in the context of contemporary software practices and the market
growth of SaaS. For example, Maryland taxes SaaS and defines it as a digital product,
but in New Jersey it is not an enumerated category, so it is not taxable.
The law currently allows a Sales Tax exemption for prewritten software that is delivered
electronically, for business use.
3. Structures. New Jersey currently taxes materials and supplies used to construct
buildings, including those that provide support services to the digital economy. The
number of physical structures used to support the digital economy are increasing,
primarily as data and server centers which support cloud computing and a range of
telecommunications systems. Related to the technology itself, there are increasing
numbers of warehouses and logistics facilities that are driven by the digital economy
(online ordering, fast delivery, robotic order fulfilment).
Any machinery and equipment used in data/server centers and logistics facilities are
subject to Sales and Use Tax in New Jersey, except when used by a BPU/FCC regulated
communications company. This has primary value for Verizon as New Jersey ry
incumbent land-line provider. (N.J.S.A. 54:32B-8.13)
4. Cloud Services. Cloud services allow a customer to access and use the software of a
service provider through the internet. The software is hosted by a seller that owns,
operates, and maintains it.
New Jersey law does not specifically address cloud computing services; therefore, SaaS
and Platform as a service (PaaS) are not taxed.
The market activity of cloud service transactions continues to increase and it may be
beneficial to review the tax policy concerning cloud services. To effectively tax cloud
computing services, nexus and sourcing issues will also have to be addressed.
5. Telecommunications. Telecommunication services refer to the electronic
transmission, conveyance, or routing of voice, audio, video, or any other signals from
one point to another location, including Voice-Over-Internet-Protocol (VOIP). Internet
access is excluded from the telecommunication definition by way of the Internet Tax
Freedom Act, which prohibits state taxation of internet access.
Traditional wireline telecommunications services have been subject to a
comprehensive State tax regime. With many of the services they provide now being
pg. 6
offered through the cloud and other internet services, it appears that the tax revenue
from telecommunications services has decreased.
The significant shift away from cable TV service (which is excluded from
telecommunications and not taxable) to streaming services, should result in additional
revenue to the State, since most streaming services appear to include the ability to
download, which makes them subject to tax.
A thorough review of State tax policies affecting the telecommunications industry is in
order.
6. Internet and Data Services. Internet and data services are related to providing
internet access and hosting, searching, retrieving, and streaming content and
information on the web.
The FCC defines internet service as a service enabling consumers to access the internet
or related services that are provided by an Internet Service Provider (ISP).
A data service allows users to submit queries to applications to access and manage
disparate data. In this context, data services include streaming video (e.g., Netflix,
Disney+, Apple TV, YouTube, etc.), accessing information on websites, and
downloading stock market tables.
The State currently imposes sales tax on specified digital products (as defined by the
Streamlined Sales and Use Tax Agreement), which includes digital audio-visual works,
digital audio works, and digital books, that are transferred electronically.
The sale of data itself may constitute an information service, which is specifically
subject to tax.
There is considerable cross-over between internet and data services and cloud
computing services. Any tax specifically applying to either category will likely have
residual effects on the other.
The nature of digital goods and services appears to warrant its own tax regime, similar
to, but separate from, traditional Sales and Use Taxes.
7. Digital Intermediary Services. These are services that provide information on, and
successfully matching, two independent parties to a transaction via a digital platform
in return for an explicit fee. The output of these platforms typically consists of the fees
paid by the producer and/or the consumer of the service being intermediated.
New Jersey law does not specifically refer to digital intermediary services; however,
marketplace facilitators who sell tangible property, specified digital products, and
pg. 7
taxable services to New Jersey customers collect New Jersey Sales Tax on behalf of
third-party sellers.
Efforts to identify digital intermediaries/or marketplaces may improve the current tax
compliance in New Jersey. Industry experts appear to need clarification on what
businesses fall into this category.
Sellers through online marketplaces may not realize their Sales Tax obligations if they
are not familiar with what is included in the definition of specified digital products and
which services are subject to tax in New Jersey.
8. Interactive Platforms. These are services that combine elements of cloud computing
and internet/data, which are fee-based or free, or blended. In the most prevalent
example, online video game operators and mobile applications are required to collect
Sales Tax on in-game purchases that involve a download. Major providers appear to be
properly collecting the tax. Administrative challenges include determining the point of
purchase and location of seller. The growing prevalence of virtual currencies creates an
added challenge.
B. Administrative and Institutional Capacity
State Government Organizational Capacity: The need to improve capacity to address the
challenges of digital economic activity is further evidenced by the fact that the digital world
is here to stay, and drives decisions and practices of all organizations in the economy, all
sizes of business, non-profits, and government. The effects of these practices need to be
studied, understood, and integrated into state policies on an ongoing basis.
The Department of the Treasury needs to dedicate staff that can develop and maintain an
understanding of digital economic policy.
While not a direct part of the study, the challenge of understanding these issues extends to
professional staff require the capacity and opportunity to advance their knowledge so they
can meet their obligations to the Legislature.
New products or variations on existing ones can create business uncertainty about the
advance of making a sale. This information is also vital to business and state compliance
auditors. This has been reported as a challenge in New Jersey tax administration. However,
the Division of Taxation has a Letter Ruling process in place, whereby businesses can obtain
a determination of the tax consequences of a transaction in advance.
1. Create a Digital Economy Policy Office. The Department should develop a digital
economy research capacity vested in a digital policy research office. That office should:
pg. 8
a. Monitor and engage with national organizations that support state tax agencies1,
and with New Jersey business organizations that deal with tax policy and
administration.
b. Work with those organizations, commence development of a Sales and Use Tax
policy model based on the idea that New Jersey move to a dual domain of physical
and digital products as described in this Report. This approach would ideally be
taken along with other states in order to ease administration and taxpayer
compliance. This would integrate with the current research efforts being
undertaken by the MTC and SST Governing Board.
c. Provide staffing and support to agencies dealing with digital economy issues.
d. Establish an internal liaison function with State agencies whose activities are
integrated with tax policy.
Comprehensive Technology Risk Management Planning
Support a comprehensive project and risk mitigation plan as part of the
development of the recently commenced Integrated Tax System project. As
important, is a similar plan to ensure ongoing support of existing functions. In both
cases, agencies within and outside of Treasury need to be involved and commit to
This also requires an oversight function for a dispute resolution process. This
recognizes the need for interagency cooperation for these mission critical and high-
risk systems.
Telecommunications policy: The State, by action of either the Executive or Legislative
The study should make recommendations that address the ongoing
evolution of the industry and technology in the context of tax policy.
Impact of Electric Vehicles:
Taxation, BPU, DEP, and OREA should review implications of the Sales Tax
exemption for Zero Emission Vehicles.
1
These specifically include the Multistate Tax Commission (MTC) and Streamlined Sales Tax Governing Body (SST). The
state is a member of both organizations. It is not coincidental that both have recently commenced studies similar to this one.
pg. 9
5. OREA should increase its capacity to understand and analyze the economic impact of
as appropriate.
6. The Legislature should provide the Office of Legislative Services sufficient new
resources to improve its capacity to understand the impact of the digital economy on
tax policy.
pg. 10
pg. 11
III. Research Process
This section reflects the research and findings that led to the Recommendations. The research effort
included the following activities:
A. Literature search covering a wide range of digital economy and state taxation issues, which
initially included locating a useful description of those goods and services that make up the
digital economy in the US. The 2021 BEA report sets forth the key components and
subcomponents that comprise the digital economy. Those elements are shown in Table 1 at
the end of this Report.
B. Focus Group meetings and interviews of national and New Jersey subject matter experts,
consisted of 12 meetings with a total of 50 individuals. The subject areas and expert groups
included the following:
NJ State Fiscal Experts Technology Industries
Digital Startups Tax Lawyers
Council of State Taxation Tax-focused
economists
Tax Policy Experts
Academicians
NJ Private Sector and Tax Accounting Experts National State Tax Organizations
C. Meetings were held with Division of Taxation experts on the different taxes affected by the
digital economy.
D. Research staff developed an analysis of how the digital economy affects each of the BEA
digital components and two separate ones: Interactive Blended (free and pay) platforms,
and Digital Advertising and Data.
E. Research staff developed an assessment of the impact of the digital economy on individual
State taxes.
What we learned is the synthesis of all the above, plus the general knowledge about New Jersey
government policies.
IV. Underlying Observations about the Digital Economy
A. Changes in digital technology are ongoing. That makes the notion of setting policy once and
forgetting about it untenable. For example, the change in the cryptocurrency and NFT markets
that went upside down in May 2022 shows how quickly it can change. The digital world requires
regular policy care, intellectual feeding, and informed decision making considering the risks that
are inherent in many sectors.
B. We found that digital economic transactions generally:
1. Disregard political boundaries and state policies;
2. Have been difficult to quantify which has challenged policy makers at all levels of
government and in business;
3. Have represented unanticipated changes in the economy in the past and presents
uncertainty for the future;
4. Reflect the portability of sellers/providers and state policies that affect business location
decisions;
C. Within the digital economy, there are elements of tax policy and administration that New Jersey
cannot control, which are at the whim of other tax policy actors. For example:
pg. 12
1. The nature of our federal system leaves each state to work out its own tax policies that
are consistent with federal law and subject to the economic and political dynamics of each
state.
2. The complexity and costs of tax administration faced by the business community when
states adopt different and sometimes contradictory policies. Very often, what affects one
state has a ripple effect on many and affects business compliance costs.
3. There is underappreciated value to all states of the work of tax policy coordinating
organizations such as the Multistate Tax Commission and the Streamlined Sales Tax
Governing Board.
4. The federal Internet Tax Freedom Act produces ongoing interpretations and economic
distortions driven by the requirement that states generally tax similar physical and digital
products the same.
5. There is often a significant time lag for state policies to catch up to the economy. This
results in economic distortion, challenging political decisions, and unintended tax
preferences through a lack of policy action.
V. What We Know About the Digital Economy
A. Digital tech is embedded into and has affected the traditional economy. The
primary source All organizations are
dependent on the BEA for economic data statistics. The reality is that tal
. The lack of reliable past and current digital economy data creates
significant challenges in determining the possible impact of changes in tax policy.
B. Digital tech is creating a new class of digital goods and services that can be identified, sold, or
used, but may only exist as computer code that users can access. This is not
compatible with the existing physical domain model of taxing physical (tangible) goods and
human focused services. New laws are necessary to capture this economic activity and resolve
these challenges.
C. There is a new class of service provider or seller - the platform. This has created disruption in how
goods are marketed and sold, and the use of platforms is generally cost-free to users or serve as
a fee based "digital intermediary." Revenues of the platform operators come from (at least) four
categories.
1. Sales of ads displayed to users;
2. Commissions and/or fees for goods and services sold through the platform;
3. Paid subscriptions for base or a premium level of service beyond free;
4. Sale of data collected in exchange for the services provided by the platform, website, or
application.
D. Another new class of digital services that was not anticipated under current Sales and Use Tax,
Income Tax and Corporate Tax regimes, is managed
through digital intermediaries.
1. Also referred to by these companies as - workers, they find
their work or customers through online "d
which affects personal income and employment/labor law-driven tax policies.
2.
pg. 13
delivery services (e.g., grocery and restaurant), transportation (ride sharing, Uber, Lyft),
household or online tasks (TaskRabbit, Mechanical Turk) and residential
accommodation sharing (AirBnb).
3. The questions of employment and labor law surrounding workers is rapidly evolving as
different governments look at regulatory interpretations and new laws to address this
new class of worker.
E. The Internet of Things (operations technology) is rapidly developing with digital sensor-type
devices that surround us that collect and transmit data that is often sold, resold, merged with
other data and repackaged in a new form with additional attributes. These services are evolving
from outright purchases to monthly service charges that include transmitting data over wireless
and wired networks. This raises questions about their possible status as telecommunications
services and those tax implications, which warrant consideration about traditional regulation
and tax policies concerning this field.
F. T includes how we identify economic or taxable
transactions. This is where so-called free services are paid for by the attention of the user that
provides the service with a wide range of user data, and nexus and sourcing information that is
relevant to tax policy. At this time, the value of the data asset is treated as an intangible good
by the accounting regulators. While data may have been logically classified as an intangible asset
20 years ago, can be bought and sold, and is used to generate
other forms of revenue. The intangible classification needs to change.
VI. The Challenges of the Digital Economy
A. An overarching goal is to ensure that taxation of economic activity is fairly balanced and relevant
parts of the economy are not inappropriately discriminated against. This also warrants that like
economic transactions are fairly taxed, treatment of competing businesses (horizontal equity) is
fair, Sales Tax exemptions are provided for business inputs, sales taxation is on end-use
transactions, all forms of digital income are accounted for in both personal and business tax
policy, and there is flexibility to address the technological changes ahead.
B. The state tax environment has made significant efforts to coordinate policies and set standards
that can reduce the friction experienced by businesses. Digital technology and the digital
economy have made it easier for businesses in one state to do business in many (even all) states.
But the more states work together to have consistent definitions of terms and compliance
activities, the easier it is for businesses to comply.
C. These issues have detailed nuances, variations, and outliers to address. The details will need to
Meeting this challenge includes developing mechanisms to address these realities:
1. Identification of who and where the seller and users are can be difficult or impossible
to determine. A variety of approaches may be needed to understand where a customer
is located or assumptions must be made when a source cannot be identified.
2. Anonymity of buyers and sellers is a core element of many aspects of the digital
economy. When combined with new tools of value creation and exchange, this creates
a universally daunting, but ultimately resolvable task of establishing tax nexus and
identifying the participants to the transaction.
pg. 14
Digital economy taxation is an International challenge - professional tax policy organizations are
working on it.
D. The Digital Economy did not happen suddenly. It started some thirty years ago and will continue
to evolve. State policy makers need to develop the capacity to understand, and the flexibility to
routinely address, this evolution.
VII. Analysis of the Impact on Specific New Jersey Taxes
A. Vehicle Taxation: Implications of Electric Vehicles
1. Background: An industry driven by digital technology is electric vehicles (EV); an EV can
have upwards of 2,000 embedded semiconductor chips. The development of automated
vehicles will increase that number. EVs are becoming embedded in the overall economy
and have a direct impact on State tax policy. New Jersey incentivizes them in its Energy
Master Plan and Clean Energy Program. This amplifies their impact on the digital
economy and State policy.
2. Motor Fuel Taxes: Increased EV use leads to reduction of Motor Fuel tax and Petroleum
Products tax revenue that is pledged to the Transportation Trust Fund to fund
transportation improvements. This is a known issue to energy and fiscal policy makers.
It remains an open issue and policy research is warranted to develop an understanding
of the risks, potential impact, timing and range of possible solutions that can be
considered.
3. Energy Tax Receipts (ETR): New Jersey currently charges the Sales Tax rate on energy
(electricity and natural gas) with the proceeds dedicated to the ETR program. The
program funds municipal property tax relief. As electricity used to charge EVs increases,
ETR proceeds will increase, but revenue to the Transportation Trust Fund will be
diminished.
4. Finally, State policy providing a 100% Sales Tax exemption for electric vehicles will
increasingly reduce sales tax revenue from this product that has historically been the
single largest contributor to the Sales Tax.
B. Telecommunications Taxation
1. Telecommunications tax policy is complicated and does not reflect the current challenges
presented by the digital economy. These affect economic decisions distorted by:
a. Legacy BPU regulatory policy (e.g., disappearing landlines);
b. Advent of VOIP and robust competition from other competitors operating under
different tax regimes;
c. Impact of changes in the legacy cable television market and the role of legacy telecom
company regulation;
d. Impact of the digital divide on low income and underserved urban & rural areas;
e. Tax policies not resulting in expected revenue;
f. Impact of federal government policies that supersede state interest, and often
conflict with them.
2. These and related circumstances warrant a separate study of the telecom environment
for the digital world. The current mix of government regulation, competition, and a
public utility model does not appear consistent with contemporary markets and
advancing technologies.
pg. 15
C. Digital Economy and the Other Taxes
1. Gross Income Tax (GIT)
a. Growth of digital or virtual assets (e.g., cryptocurrencies and NFTs) as income and
investments pose challenges to policy makers and tax authorities. This includes
reporting of assets, calculating value and gains, and understanding nexus and sourcing
for digital income. Legal recognition of digital assets and tax treatment of investments
is an important step for policymakers.
b. Changes in workplace driven hybrid and remote work affects income nexus and
taxes paid by employers and employees. This may affect the income reporting and
crediting practices involving New Jersey residents working in NYC or Philadelphia who
may find themselves spending more time working in New Jersey.
c. There is a growing need to resolve disputes related to gig workers and how their
employment, classification, and benefit status will affect income reporting and tax
policies.
d. The growth of the digital economy will likely add to the number of individuals filing
tax forms, but might reduce other jobs that shrink due to the digital economy. This
will also be supplemented by digital economy startups that begin as partnerships and
other pass-through business structures that result in income reported as GIT rather
than Corporate Business Tax receipts.
2. Corporate Business Tax (CBT)
a. Tied to its impact on the GIT, the evolution of regular or hybrid work at home or
in different-from-home-state satellite offices has implications for the CBT.
b. Growth of the digital economy will invariably add to the number of organizations
that find it more advantageous to file under the CBT.
3. Property (Real Estate) Tax
a. The digital economy has several drivers that affect property taxation (e.g., the
development and operation of server farms/data warehouses, aka, the cloud; physical
goods warehouses; and staged delivery facilities). The development of these facilities
takes place in green fields and redevelopment of existing sites that have lost value
(e.g., shopping malls) or have met the end of their useful or economic life.
b. These facilities often have offsetting attributes in different combinations
depending on location: new jobs vs. increased traffic; increased property tax revenues
vs. degraded environment.
4. Inheritance Tax: The Inheritance tax may not be a critical tax policy issue at this time,
but as more and more individuals hold digital assets, tax policies on valuing and accessing
digital assets will require policy and administrative attention.
pg. 16
5. Transportation Networking Companies -
a. The tax imposed on transportation networks is a surcharge on ride transactions
booked through an online application.
b. Digital technology drives the TNC business. Ride sharing drivers are considered
independent contractors by TNCs. This relieves the companies of meeting state
employment regulations and employee tax contributions (e.g., unemployment, family
leave, sick leave, etc.). Drivers are obligated to report state income taxes and meet
independent contractor tax obligations.
c. There is current policy debate about the status of TNC drivers and where they fit
into employment law. Resolution of these issues will affect GIT, CBT, and tax
administration issues.
6. Transient Housing Rentals
a. Sales Tax and the State Occupancy Fee are imposed on all rentals of transient
accommodations (aka, short-term rentals) obtained through a transient space
marketplace or that is a professionally managed unit.
b. It appears that current policies (effective in 2019) are working, although the law
creates a disparity in the tax consequences based on the means through which the
accommodation is rented. Municipalities should examine the impact of transient
accommodations on local housing supply and consider local, or recommend State,
policies to mitigate those issues.
VIII. NJ Tax Equity/Discrimination Analysis
The analysis of the impact of the digital economy for individual New Jersey taxes included a tax
equity/discrimination element. The following summarizes those assessments.
The pandemic highlighted long-held concerns that lower-income individuals, families in urban areas and
all residents in rural areas, have limited access to high-speed (broadband) internet. During the pandemic
internet providers and government agencies stepped up to address the challenges, particularly for K-12
students. But post-pandemic there is still a reality that suitable access is a challenge in many parts of the
State. In a digital economy, robust internet access is critical for education, jobs and even basic survival
as more and more businesses and government agencies digitalize their services.
Lack of access to broadband can put workers at a disadvantage when working for companies that offer
remote positions, either due to the type of work or cost of appropriate digital resources. This has a direct
effect on household income.
Very often digital asset owners are younger people at all income levels who are not sophisticated
investors. The rapid changes in value of cryptocurrencies and other digital assets may have an impact
based on how much personal wealth is invested.
pg. 17
EVs represent dramatic improvements over traditional internal combustion engines in urban
environments. The advantages of EV use extend to all income groups and locations, because EVs result
in a decrease of internal combustion engine exhaust. However, the impact in urban areas is magnified
due to existing pollution issues. Current policies, however, have not been able to provide specific EV
purchasing incentives to low- and moderate-income households that rely on cars for transportation.
Likewise, the advent of battery-powered transit vehicles will serve to improve the urban environment.
Digital economy issues such as solar power supply, EVs and distributed energy, all touch on energy
affordability and access by low- and moderate-
has existing options to address this segment. Policy makers need to continue their attention to these
issues as they evolve.
Data and physical goods warehouses continue their unprecedented rate of development in all parts of
the State. The positive and negative aspects are the same wherever they are: jobs, economic
development, and local government tax revenue are impacted, with bumps up against vehicle air
pollution, potential traffic congestion, drainage issues, and energy use.
The advent of the TNC algorithms used to price prearranged and shared rides has resulted in
unanticipated consequences in low-income communities. In addition to increasing prices during
a study of rides to and from low-income communities found users being up-charged.
The advent of the S ved an initial problem in the Newark-Liberty Airport area
of unfair competition between TNC operators and drivers, and legacy, regulated tax operators and their
drivers.
Finally, the practice of Transient Rental platforms renting apartment or condominium units for short-
term/transient rentals has been shown in some places to adversely affect the permanent housing
market, with a particular impact at the affordable end of the housing spectrum. This has been
acknowledged by AirBnB. They have a program that provides some financial support for construction of
affordable units in various markets, but it is limited.
pg. 18
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