Statement on the Signing of A-2720 ( UEZ Sales Tax Exemptions for Small Business)

Joan Verplanck, President, New Jersey Chamber of Commerce

The economic future of New Jersey will depend on the state having vibrant urban centers where people choose to live and work. The Urban Enterprise Zone program assists us in reaching that goal by encouraging investment in our cities that otherwise might not have taken place. Economic development programs such as these are more important than ever, especially in the current economic environment in which we live.

I am pleased the Governor and members of the Legislature understand how important it is for our employers to be solely focused on running their companies – and not bogged down in paperwork in order to participate in the UEZ program. I especially applaud Senator Stack and his colleagues who worked on this bill for recognizing that there was a problem that needed to be fixed and for acting to rectify the matter.

Our leaders are responding to this economic crisis by rising to the occasion and offering innovative solutions, not only through today’s bill signing, but by all the initiatives that have both been passed and signed into law – or are moving quickly through the legislature. Although this has not been the most cheerful of holiday seasons, there should be some comfort in knowing that many of the actions taking place as of late will position New Jersey positively once the storm clouds have passed.

A-2720 repeals the requirement enacted last year that requires a business that qualifies for a sales tax exemption to pay the sales tax and then apply for a rebate, rather than exempting the sale from tax at the point of purchase. Since the requirement that certain small businesses have to apply for the rebate program was implemented, a significant number of employers have dropped out of the UEZ program, citing the significant administrative burdens and high costs of complying with the new requirements. Until this bill was signed into law, businesses with annual gross receipts of less than $3 million were exempt from sales tax at the point of purchase. Larger businesses were also exempt, but had to pay sales tax and then apply for a rebate. This bill increases the annual gross receipts threshold to $10 million, easing the paperwork burden on hundreds of employers and allowing them to receive sales tax exemptions more easily.

Dec. 17, 2008