Gov. Murphy Reinstates 5 Urban Enterprise Zones
Recent legislation signed by New Jersey Governor Phil Murphy reinstates five urban enterprise zones, which had expired on December 31, 2016.
Effective May 30, 2018, the State of New Jersey reinstated the urban enterprise zone (UEZ) designations for Bridgeton, Camden, Newark, Plainfield, and Trenton. Certifications obtained prior to reinstatement are no longer valid. Therefore, if a business in one of these UEZs was previously certified, the business will need to re-apply for certification using the UEZ Business Certification System accessible through the NJ Premier Business Services website. Once certified, a business must submit an annual report and apply for recertification every three years.
For qualified businesses, benefits of the UEZ program include: the right to purchase qualified items and most services exempt from sales tax, corporation business tax credits for certain businesses hiring new employees or making an investment within a UEZ (but not both), and partial sales tax exemption on most taxable retail sales of tangible personal property occurring within a UEZ. The current sales tax rate in all UEZs is 3.3125%.
Also of note is that the duration of other active UEZs set to expire between September 30, 2019 and November 26, 2023 have been extended until December 31, 2023. These UEZs and their previous expiration dates are as follows:
- Bayonne (September 12, 2022);
- Elizabeth (November 26, 2023);
- Jersey City (November 26, 2023);
- Kearny (November 26, 2023);
- Millville/Vineland (September 30, 2019);
- Orange (November 26, 2023);
- Roselle (July 16, 2022); and
- Wildwood—includes North Wildwood City, Wildwood City, Wildwood Crest Borough, and West Wildwood Borough (October 31, 2022).
A qualified UEZ business will be issued UZ-4 and UZ-5 certificates by the New Jersey Division of Revenue that will allow the business to make purchases exempt from sales tax and claim the partial sales tax exemption on certain taxable retail sales of property.
For additional information on New Jersey’s urban enterprise zone program, please contact Scott Smith, Director, State and Local Tax Services, at Scott.Smith@CohnReznick.com or 973-364-7720.
Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. Nor is it sufficient to avoid tax-related penalties. This has been prepared for information purposes and general guidance only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its members, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.