New Sales Tax Exemption for Sales of Natural Gas, Electricity and Utility Service to Certain Qualified UEZ Manufacturing Businesses (11-3-04)

Public Law 2004, c. 65 amended the New Jersey Urban Enterprise Zones Act to include a New Jersey sales and use tax exemption for energy and utility service sold to certain qualified urban enterprise zone (UEZ) businesses. Currently, the UEZ exemption for purchases of tangible personal property and services for use exclusively at the zone location excludes such purchases of energy and utility service. The new law extends the sales tax exemption benefit to include these purchases for certain qualified UEZ manufacturing businesses.

For purposes of the exemption, "energy" is defined as natural gas and electricity, and "utility service" is defined as the transportation or transmission of energy by mains, wires, lines or pipes.

In order to be eligible, a qualified UEZ business, or a group of vertically integrated qualified UEZ businesses within a single redevelopment area, must employ at least 500 people within an enterprise zone, at least 50% of which are directly employed in a manufacturing process.

The New Jersey Commerce and Economic Growth Commission will make the determination as to whether a qualified UEZ business meets the statutory requirements for exemption. Once a determination has been made, the Commission will notify the Division of Taxation, which will issue an exemption certificate specific to the business's energy and utility service purchases for use at the zone location.

The Division will issue a qualified UEZ business the Urban Enterprise Zone-Energy Exemption Certificate (UZ-6), which must be provided to energy vendors in order to document the tax exemption. Upon receipt of this Exemption Certificate, an energy vendor should not impose the New Jersey sales tax on the retail sale of energy and utility service delivered and consumed at the UEZ business's zone location, which will be listed on the form. The UZ-6 will not be transferable and can only be issued to the vendor by the qualified business.

Entitlement to this sales and use tax exemption will be reviewed annually by the Commerce and Economic Growth Commission, and if the business continues to meet the statutory criteria, the UZ-6 Exemption Certificate will be renewed.

For additional information on the application, approval and renewal process, please contact the following offices directly:

Lauren Moore, PP
Office of Business Advocate
609-292-3863

New Jersey Urban Enterprise Zone Help Desk
877-913-6837 or via email at helpdesk@dca.state.nj.us

New Jersey Commerce and Economic
Growth Commission
P.O. Box 820
Trenton, New Jersey 08625-0820