Energy/Utility Tax Exemptions for Qualified Businesses in Urban Enterprise Zones

—Summary of the Law—

On January 12, 2006, A-3484/S-2358 was passed and became P.L. 2005, ch.374. this law gives manufacturing- intensive businesses located in Urban Enterprise Zones (UEZs) and Salem County a complete sales and use tax exemption on energy and utility services purchases.

—Eligibility—

Businesses located in UEZs that employ 250 people or more, with 50 percent employed in a manufacturing process, are eligible for the 7 percent sales tax exemption on energy/utility consumption. Businesses in Salem County that employ 50 people or more, of which 50 percent work in manufacturing, are eligible for the tax exemption.

How are eligible businesses billed?

Businesses that are eligible for the tax exemption will not be charged sales and use tax in their energy/utility bills. However, they are still subject to applicable Board of Public Utilities tariff regulations.

What is the process for obtaining eligibility?

Businesses that comply with the applicable requirements mentioned above should contact their local UEZ coordinator for the appropriate tax package.

For Salem County applicants, applications will be submitted to the New Jersey Economic Development Authority (EDA). After reviewing the application, a site visit will be scheduled and a recommendation will then be made to the EDA to either approve or deny the application. If approved, an exemption certificate will be issued by the New Jersey Department of Treasury. If denied, applicants can re-apply after 90 days.

—For More Information—

UEZ applicants: For a contact list of local UEZ offices and for more information on the application process, visit http://www.state.nj.us/treasury/taxation/su_uez.shtml or contact Joseph Cirafici, Administrative Analyst, UEZ Authority at 609-292-1912 option 3.

Salem County applicants: For the appropriate tax exemption application and for more information on the application process, contact Justin Kenyon of the New Jersey Economic Development Authority at (856 ) 361- 2746.

Updated: September 5, 2017

This information should not be construed as constituting specific legal advice. It is intended to provide general information about this subject and general compliance strategies. For specific legal advice, NJBIA strongly recommends members consult with their attorney.