STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Senator MICHAEL L. TESTA, JR.
District 1 (Atlantic, Cape May and Cumberland)
Senator VIN GOPAL
District 11 (Monmouth)
Senator M. TERESA RUIZ
District 29 (Essex and Hudson)
Co-Sponsored by:
Senators Sarlo, Singer, Stack and Cruz-Perez
SYNOPSIS
Repeals $100,000 cap on sales and use tax exemption for certain capital improvements made by businesses participating in Urban Enterprise Zone program.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act repealing the $100,000 cap on the sales and use tax exemption for certain capital improvements, amending P.L.2021, c.197.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 8 of P.L.2021, c.197 (C.52:27H-79.1) is amended to read as follows:
8. a. Receipts from [the first $100,000 of] retail sales of materials, supplies, and services for the exclusive use of erecting structures or buildings on, or improving, altering, or repairing the real property of a qualified business, or a contractor hired by the qualified business to make such improvements, alterations, or repairs, are exempt from the taxes imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.); provided, however, receipts from retail sales of materials, supplies, and services for the exclusive use of erecting new structures or buildings on, or substantially improving, altering, or repairing the real property of a qualified business shall be eligible for such tax exemption notwithstanding the limit imposed pursuant to this subsection.
b. As used in this section:
"Qualified business" includes a person who is certified as a qualified business by the authority and provided a UZ-4 certification by the authority. A person who is certified as a qualified business may apply to the authority for a UZ-4 certification provided that the person owns or leases and regularly operates a place of business located in an eligible block group, as defined in subsection a. of section 12 of P.L.2021, c.197 (C.52:27H-99). The Department of the Treasury shall provide to a qualified business a certificate evidencing its UZ-4 certification, which certificate shall indicate the location at which the sales tax exemption provided for in this section is available.
"Substantially improving, altering, or repairing" means any reconstruction, rehabilitation, addition, or other improvement to a structure, of which the total cost equals to or exceeds 50 percent of the market value of the structure before the start of construction of the improvement. The UEZ Authority may, from time to time, alter this definition through regulation to respond to changing market conditions.
(cf: P.L.2021, c.197, s.8)
2. This act shall take effect immediately and shall apply retroactively to sales and uses on and after January 1, 2022.
STATEMENT
This bill retroactively repeals the $100,000 cap on the sales tax exemption for retail sales of materials, supplies, and services for the exclusive use of erecting structures or buildings on, or improving, altering or repairing the real property of a qualified business, or a contractor hired by the qualified business to make such improvements, alterations, or repairs. This sales tax exemption is currently available to qualified businesses participating in the State Urban Enterprise Zone program.
The sales tax exemption was enacted in August of 2021 with a cap of $100,000, and applies to sales and uses on or after January 1, 2022. This bill keeps the exemption in place but eliminates the cap retroactively to January 1, 2022.