Legislation sponsored by Assemblywoman Pamela R. Lampitt and Assemblyman Albert Coutinho to spark economic development by increasing the number and types of businesses eligible to benefit from tax exempt purchases in Urban Enterprise Zones is advancing.
“In tough economic times, we must do everything we can to ease administrative burdens and red tape that have hurt struggling small businesses in UEZs,” said Lampitt (D-Camden) “This bill will throw UEZ businesses a lifeline, promoting economic development and job creation by expanding the number and types of businesses that will benefit from tax exempt purchases at the point of sale, at a time when such aid is critical.”
“UEZs have been a successful program throughout our state, but with this change we can make them even more successful by easing back on burdensome rules and regulations that have limited economic growth and job creation,” said Coutinho (D-Essex), who chairs the Assembly Commerce and Economic Development Committee that released the bill. “This can only benefit communities that rely on UEZs as a centerpiece of their redevelopment efforts.”
Under current law, sales of tangible personal property, except motor vehicles and energy, and sales of services, except telecommunications and utilities, to a qualified business for the exclusive use or consumption of that business within a UEZ are exempt from the sales and use tax at the point of sale if the business is a “small qualified business” with annual gross receipts of less than $10 million.
Qualified UEZ businesses with annual gross receipts equal to or greater than $10 million are also eligible for the exemption, but are required to pay or remit the applicable sales or use tax on qualified purchases and submit a claim for refund to the Division of Taxation in the Department of the Treasury within one year of the date of the transaction.
This bill (A-1559) extends the point of sale sales tax exemption to zone-located qualified businesses.
Under its provisions, businesses that have been determined and certified by the Director of the Division of Taxation in the Department of the Treasury to have a business location or locations exclusively within a UEZ are eligible to forgo the rebate process, regardless of the size or the amount of annual gross receipts generated by the business during the prior annual tax period.
The bill was approved 69-10 by the Assembly in June and has now been referred to the Senate Economic Growth Committee.