Official Site of The State of New Jersey

Zero Emission Vehicles Exemption

P.L. 2024, c. 19 repeals the Sales and Use Tax exemption on sales of zero emission vehicles (ZEVs). Beginning October 1, 2024, sales of ZEVs are subject to tax, and the exemption will be phased-out over nine months. The schedule for the phase-out is as follows:

Period When Zero Emission Vehicles are Sold	Tax Rate
On or after October 1, 2024 but before July 1, 2025	3.3125%
On or after July 1, 2025	6.625%

Note: The Commissioner of the New Jersey Department of Environmental Protection certifies a list of qualified ZEVs that are affected by this change. See their website for more information.

Please check the Division's website periodically for information on updated filing and payment instructions.

Sales Prior to October 1, 2024

The New Jersey Sales and Use Tax Act provides a sales and use tax exemption for zero emission vehicles (ZEVs), which are vehicles certified pursuant to the California Air Resources Board zero emission standards for the model year.

The exemption is NOT applicable to partial zero emission vehicles, which includes hybrids such as the Toyota Prius and Honda Civic Hybrid. The exemption is also NOT applicable to labor or parts for qualified vehicles.

The definition of "sale" in the law includes rentals and leases. Thus, the exemption is applicable to the sale, rental, or lease of a new or used zero emission motor vehicle on and after May 1, 2004, to September 30, 2024.

Motor Vehicle Dealers, Leasing and Rental Companies, and Other Vendors:

In order to document the exemption for the sale or rental of a qualified zero emission vehicle, the customer should complete an Exempt Use Certificate (ST-4) and insert the statutory reference "N.J.S.A. 54:32B-8.55."

Please check our website periodically for information on updated filing and payment instructions.

ZEV Frequently Asked Questions

A copy of the bill can be found here.