New Jersey has expanded the threshold for the sales tax purchase exemption for small businesses under the Urban Enterprise Zone (UEZ) refund program to include businesses with annual gross receipts of $10 million or less in a previous tax period.
Previously, qualified UEZ businesses with gross receipts greater than $3 million were required to pay sales tax at the point of purchase for items and services used exclusively at the UEZ location, and then submit a request for a refund for the amount of tax paid. This change applies to purchases that take place on or after February 1, 2009. For purchases taking place prior to this date, Taxpayers will continue to pay sales tax on taxable sales and apply for a refund. The refund request procedure remains unaffected.
Each UEZ business that was over $3 million in gross annual receipts will be reviewed to determine if the business now meets the $10 million threshold to qualify as a small business for purposes of the exemption. Qualified small businesses will receive an UEZ Exempt Purchase Certificate with an effective date of February 1, 2009. Nonqualified businesses will be required to submit an application for exemption. They will also have to reapply for the purchase exemption at the time they are recertified.
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