James F. McDonough
Of Counsel
732-568-8360 jmcdonough@sh-law.comFirm Insights
Urban Enterprise Zones Come To An Abrupt End
Author: James F. McDonough
Date: November 21, 2016
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NOTICE TO QUALIFIED BUSINESSES LOCATED IN URBAN ENTERPRISE ZONES
The following is an excerpt from a notice that was issued by the Division of Taxation in the Department of Treasury of the State of New Jersey.
NOTICE TO QUALIFIED BUSINESSES LOCATED IN URBAN ENTERPRISE ZONES
EXPIRATION OF URBAN ENTERPRISE ZONES
Effective December 31, 2016 at 11:59 p.m.
On December 31, 2016, at 11:59 p.m., five Urban Enterprise Zones (UEZ) will expire. Your UEZ-qualified business will be immediately affected if located in one of these five zones.
Beginning January 1, 2017, your business can no longer collect Sales Tax at a reduced rate. Your business must collect and remit Sales Tax at the full effective Sales Tax rate of 6.875%.
Your business will receive an ST-2, Sales Tax Certificate of Authority, which will replace your UZ-2, Urban Enterprise Zone Certificate of Authority. Your UZ-2 expires December 31, 2016, at 11:59 p.m.
The Bottom Line
This change will require taxpayers to modify software and procedures to comply. Invariably, there will be mistakes that state auditors will find and use to establish an error rate in sales and use tax audits. What is more difficult to determine is the impact that this will have on budgets and projections for operations in those districts. Many projects counted on the savings for those services that were not exempt from sales tax.
Do you have any questions? Would you like to discuss the matter further? If so, please contact me, James McDonough, at 201-806-3364.
- Practices: Tax and Trusts & Estates
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
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No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
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