Repeals $100,000 cap on sales and use tax exemption for certain capital improvements made by businesses participating in Urban Enterprise Zone program.

A1468

ASSEMBLY, No. 1468

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman ANTWAN L. MCCLELLAN

District 1 (Atlantic, Cape May and Cumberland)

Assemblyman ERIK K. SIMONSEN

District 1 (Atlantic, Cape May and Cumberland)

Assemblywoman VERLINA REYNOLDS-JACKSON

District 15 (Hunterdon and Mercer)

Co-Sponsored by:

Assemblyman Guardian

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.�