Bill Text: NJ A3889 | 2022-2023 | Regular Session | Introduced
Bill Title: Repeals $100,000 cap on sales and use tax exemption for certain capital improvements made by businesses participating in Urban Enterprise Zone program.
Spectrum: Slight Partisan Bill (Republican 9-4)
Status: (Introduced - Dead) 2022-05-09 - Introduced, Referred to Assembly Commerce and Economic Development Committee [A3889 Detail]
Download: New_Jersey-2022-A3889-Introduced.html
Sponsored by:
Assemblyman ANTWAN L. MCCLELLAN
District 1 (Atlantic, Cape May and Cumberland)
Assemblyman ERIK K. SIMONSEN
District 1 (Atlantic, Cape May and Cumberland)
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
As introduced.
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.
