New Jersey Urban Enterprise Zone Program Faces Expiring Provisions December 31, 2016

New Jersey Urban Enterprise Zone Program Faces Expiring Provisions December 31, 2016

Receive-EmailAbout our Real Estate Services

In 1983 the State of New Jersey enacted the Urban Enterprise Zone (UEZ) program to help revitalize urban communities throughout NJ by offering incentives to companies doing business in those areas.

Those benefits not only apply to businesses headquartered in those zones, but also to outside businesses entering those areas. Companies throughout NJ have long reaped significant cost savings on purchases made in these zones by receiving a reduced sales tax rate of 3.5%. If you are an average retail consumer you may not think it is worthwhile to go out of your way to purchase a thousand dollar appliance to save thirty five bucks. If you are a contractor purchasing a significant amount of taxable materials and supplies the savings can be substantial. Contractors in competitive fields are able to factor the reduced rate into their quotes and lower their bids, increasing their chances of securing the job. If you’ve already secured a contract and are able to purchase materials in a UEZ as opposed to outside, those cost savings go directly to your bottom line.

The original timeline for the UEZ designation was twenty years, however the State of NJ previously extended the designations through December 31, 2016 and no areas have lost their status since the program began in 1983. In theory, if the program is successful than after twenty years the urban enterprise zones should be revitalized and no longer require the business incentives to have a viable economy. Advocates for extending the incentives feel that the communities have come to rely on the support and allowing the incentives to expire would severely depress their economies, wiping out any progress that had been made over the past thirty years. NJ lawmakers proposed extending the program by ten years, through 2026, but Chris Christie vetoed the bill, which is no surprise. As of today, lawmakers have proposed a temporary two year extension which Christie has yet to approve. Without approval the five UEZs facing expiration on December 31, 2016 are:

  • Bridgeton, Cumberland County
  • Camden, Camden County
  • Newark, Essex County
  • Plainfield, Union County
  • Trenton, Mercer County

The next UEZs to face expiration are Millville and Vineland, both located in Cumberland County, in September 2019. If the five UEZs above do not survive Chris Christie’s tenure, the remaining UEZs will be contingent on Christie’s predecessor for extension.

Keep an eye out for further updates. There’s still time for lawmakers to reach an agreement before these provisions expire.

Donald Foster, CPA Donald Foster, CPA
T (732) 842 3113
[email protected]

linkedin

Ask Our Experts

The information contained herein is not necessarily all inclusive, does not constitute legal or any other advice, and should not be relied upon without first consulting with appropriate qualified professionals for your individual facts and circumstances.

Previous Post

Next Post