Tax Free Purchases:
An Urban Enterprise Zone (UEZ) is a designated economically challenged area within one or more New Jersey municipalities that offers benefits to businesses and customers to boost local economic activity. The state provides qualified businesses in these zones with various tax relief incentives:
- The ability to purchase items (excluding motor vehicles and energy) and most services (excluding telecommunications and utility services) without paying Sales Tax.
- Corporation Business Tax credits for certain businesses that hire new employees.
- The ability for certified sellers to apply a partial Sales Tax exemption to most taxable sales of tangible personal property within the UEZ, allowing businesses to charge half the State Sales Tax rate on exempt sales. The current Sales Tax rate in UEZs is 3.3125%.
- Loans, grants, and assistance provided to qualified businesses from the Sales Tax collected (UEZ Assistance Fund).
- Unemployment insurance tax benefits.
- A Sales and Use Tax exemption for the purchase of natural gas and electricity used by qualified UEZ manufacturers that meet specific eligibility requirements.
Customers benefit by paying half the standard Sales Tax rate on many purchases at a UEZ Business (current UEZ Sales Tax rate is 3.3125%).
The Department of Community Affairs (DCA) oversees the UEZ program. The Urban Enterprise Zone Authority determines which businesses qualify for the UEZ tax exemptions and other benefits. Businesses must apply online using the UEZ Business Certification System with Premier Business Services. Refer to the DCA’s step-by-step instructions for help with the registration process.
Once certified, a business must submit an annual report and reapply for recertification every three years.
UEZ businesses must file the UEZ Sales and Use Tax return, UZ-50, monthly, by the 20th day of the following month. If the due date falls on a weekend or holiday, returns are due the next business day.
