KUEZ Tax Incentives

  • For retailers, 50% reduction in the amount of NJ Sales tax charged to customers
  • For every businesses, 100% sales tax exemptions on most capital purchases and tangible personal property
  • For most businesses, corporate employee tax credits
  • Unemployment insurance rebates
  • Priority financial assistance for State Programs
  • Possible regulatory relief with the State

Important Topics

Sales Tax Exemptions

  • Sales tax exemptions are available to certified businesses for a variety of goods and services. The following are some of the exemptions for taxes that are imposed by the Sales and Use Tax Act, on "tangible personal property" and "services", and which are available to "qualifying businesses":
  • The purchase of office and business equipment and supplies, furnishings, trade fixtures, repair or construction materials, and all other tangible personal property (other than conventional motor vehicles and parts and supplies). Purchases must be for the exclusive use or consumption of the business on its premises within the Zone location. Only personal property controlled by the business is eligible for the exemption.
  • Most services performed at a Zone business location are exempt; this includes repair, janitorial and maintenance services of all kinds. Telecommunications services, repairs of conventional motor vehicles and utility service are not exempt.
  • The purchase, rental, and use of non-conventional vehicles, e.g., forklifts, used exclusively at the Zones business are exempt. This exemption also applies to parts and repairs of such vehicles, even if made at a location outside a zone.
  • Leases (more than 28 days). If a business leases property (other than a conventional motor vehicle) to be used exclusively at the place of Zone business, the business may give the leasor a tax-exempt certificate to exempt the leasee from any sales or use tax otherwise due.
  • A qualified business gives its vendors or leaser a completed and executed copy of the valid UZ-5 or UZ-4 certificate. The vendor must keep the copy of the certificate for its records. The vendor does not need to be located in a Zone.

Only a “small qualified business” with annual gross receipts of less than ten million dollars may use and present vendors a UZ-5-SB certificate of exemption from sales and use tax. Other qualified businesses (with gross annual receipts of ten million dollars or more) must pay sales and use tax and then apply for a tax refund with the Division of taxation. When you apply for UEZ Business Certification, you must declare your annual gross receipts for purposes to determine if your business receipts fall above or below the one million dollar threshold.

A 2004 amendment to the New Jersey UEZ Statute provides a sales and use tax exemption for purchase of gas, electricity and gas and electricity services for qualified businesses employing 500 or more people in the zone (or “vertically integrated” qualified businesses in a redevelopment area collectively employing 500 or more in the zone). Also, at least 50% of the zone employees must be directly employed in the manufacturing process.

Corporation Business Tax Credits

Employee tax credits are issued to qualified businesses that are not retail sales or warehousing oriented. A business must be subject to the Corporation Business Tax, and hire new employees at the Zone location.

  • A one time credit of $1,500 is allowed for each new full time, permanent employee who resides in any municipality which contains a Zone, and immediately prior to employment by the business was unemployed for 90 days or dependent upon public assistance as the primary source of income.
  • A one time $500 credit is allowed for each new full time, permanent employee who did not meet the criteria for the $1,500 tax credit, but are residents of any municipality in which a designated Zone is located, and were not employed at a location within the qualifying municipality immediately prior to employment by the business.
  • In order to claim tax credits employees must remain employed for a period of no less than 6 consecutive months during the calendar year in which the credit is to be claimed.
  • The hiring business must file a completed CBT Form 300 with their NJ Corporation Business Tax Return (CBT-100). Unused credit in any tax year is not lost.

Unemployment Insurance Based Awards

  • A qualified business in a zone may be eligible for an award based upon the amount of unemployment insurance tax it has paid for certain new employees. No business with a deficit reserve ratio qualifies for this award as long as it maintains that ratio.
  • The award applies only to those employees whose gross salaries are less than $4,500 per quarter and is calculated according to a specific schedule set forth by the NJ Department of Labor.