On Monday, the Legislature approved a bill (A-4189) which would provide a two-year extension for the five Urban Enterprise Zones (UEZs) set to expire at the end of 2016. The five impacted UEZ communities are Bridgeton, Camden, Plainfield, Trenton and Newark. NJBIA supports the bill.
The bill now heads to the Governor’s desk where it awaits final action. A-4189 was introduced to address concerns expressed by the Governor in his conditional veto message of similar legislation in August.
If the bill is not signed, the five UEZ communities of Bridgeton, Camden, Plainfield, Trenton and Newark will expire on December 31, 2016, at 11:59 p.m. Beginning January 1, 2017, businesses located in these zones can no longer collect Sales Tax at a reduced rate. All businesses must collect and remit Sales Tax at the full effective Sales Tax rate of 6.875 percent. For more information, please read the NJ Division of Taxation’s notice on the issue by clicking here.
New Jersey’s UEZ program was enacted in 1983 and exists to foster an economic climate that revitalizes designated urban communities and stimulates their growth by encouraging businesses to develop and create private sector jobs through public and private investment. Businesses in UEZs are allowed to charge half of the state’s regular sales tax rate and receive incentives such as business-to-business tax exemptions, subsidies for unemployment insurance, and tax credits for hiring and investing.