Effective July 15, 2006, certain businesses located in an Urban Enterprise Zone (“UEZ”), are exempt from paying sales tax. The exemption applies to the purchase of goods and materials at the time of purchase, if the business is considered a “small” qualified business. A business is considered small if it has less than $1 million in gross receipts in the prior tax year from all of its locations.
Businesses with more than $1 million in gross receipts in the prior tax year must pay sales tax at the point of purchase and then apply for a refund of sales tax paid on purchases of goods and materials for exclusive use or consumption in the UEZ.
Small qualified businesses may use a Temporary Exemption Purchase Certificate (UZ-5-SB-Temporary) until September 30, 2006. For exempt purchases made on or after October 1, 2006, small qualified businesses must apply for an Exempt Purchase Certificate (UZ-5-SB) prior to August 31, 2006.
To claim a refund of taxes paid, a qualified business must complete Form A-3730-UEZ, and provide such documentation as copies of sales invoices showing tax was charged and paid on or after the law change date (7/15/06). Proof of payment must also be supplied in the form of copies of cancelled checks or electronic fund transfers. A computer spreadsheet listing each invoice or part of an invoice which is part of the total amount of the sales tax claimed for refund must also accompany the refund claim.
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