New Jersey offers various tax relief incentives and financial benefits with an often overlooked and underutilized program with its Urban Enterprise Zone program. If you are in one of the designated areas, there are a lot of benefits to the program so it’s important that you ensure you’re taking full advantage of them.
The Urban Enterprise Zone Program was created in 1983 with the goal of stimulating the economy in distressed areas by providing tax relief incentives. In 2018, Governor Murphy reinstated five expired zones which are now set to expire on December 31, 2023. These five urban zones include Bridgeton, Camden, Newark, Plainfield, and Trenton. If your business is located in one of these five urban zones, now is the time to apply to the program. In total, there are 32 Urban Enterprise Zone (UZEs) located in 37 cities. In order to determine whether you are in one of the designated zones, please use this link.
The benefits available to a qualified business in an Urban Enterprise Zone includes:
- Tax free purchases on certain items such as capital equipment, facility expansions, and upgrades
- Reduced sales tax rate, currently 3.3125%
- Subsidized unemployment insurance costs for employees who earn less than $4,500 per quarter
- Tax credit of up to $1,500 for new permanent full-time employees hired or up to 8% Corporate Business Tax credit on qualified investments
- Financial assistance from agencies such as the NJEDA
- Energy sales tax exemption for qualified manufacturing firms
In order to qualify, the business must be:
- Registered with the state of NJ,
- Located in one of the 32 designated zones,
- In tax compliance with NJ, and
- Certified by the NJ UEZ program.
Apply online using the UEZ Business Certification System which can be accessed through the State’s Premier Business Services website. The New Jersey Department of Community Affairs has step-by-step instructions on how to register. Once a business is accepted, there is a requirement to submit an annual report and apply for recertification every three years.
Author: Amanda Voorman, CPA, MST | [email protected]
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