ASSEMBLY, No. 2331
STATE OF NEW JERSEY
INTRODUCED SEPTEMBER 19, 1996
By Assemblymen LeFEVRE and BLEE
An Act establishing annual tax review and certification renewal of qualified urban enterprise zone vendors, amending P.L.1983, c.303.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 21 of P.L.1983, c.303 (C.52:27H-80) is amended to read as follows:
21. Receipts of retail sales, except retail sales of motor vehicles, of alcoholic beverages as defined in the "Alcoholic Beverage Tax Law," R.S.54:41-1 et seq., cigarettes as defined in the "Cigarette Tax Act," P.L.1948, c.65 (C.54:40A-1 et seq.) of manufacturing machinery, equipment or apparatus, made by a certified vendor from a place of business owned or leased and regularly operated by the vendor for the purpose of making retail sales, and located in a designated enterprise zone established pursuant to the "New Jersey Urban Enterprise Zones Act," P.L.1983, c.303 (C.52:27H-60 et al.), are exempt to the extent of 50% of the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.).
Any vendor, which is a qualified business having a place of business located in a designated enterprise zone, may apply to the Director of the Division of Taxation in the Department of the Treasury for certification pursuant to this section. The director shall certify a vendor if [he shall find] the director finds that the vendor owns or leases and regularly operates a place of business located in the designated enterprise zone for the purpose of making retail sales, that items are regularly exhibited and offered for retail sale at that location, and that the place of business is not utilized primarily for the purpose of catalogue mail order sales. The certification under this section shall remain in effect [during the time the business retains its status as a qualified business meeting] for a period not to exceed one year. The director shall renew a certification upon application of the vendor if the vendor continues to meet the eligibility criteria of section 27 of P.L.1983, c.303 (C.52:27H-86) and the certification requirements of this section. However, the director may at any time revoke a certification granted pursuant to this section if he shall determine that the vendor no longer complies with the provisions of this section.
The director shall review the records of each vendor applying for or renewing certification as a qualified business in a designated enterprise zone. If the director determines that the vendor has not filed all required tax and information returns or has not paid or remitted all tax, penalties, interest or fees due, the director shall issue a notice of delinquency listing unfiled returns or balances due. The director may require a vendor to resolve all delinquencies and deficiencies before certification is issued or renewed, or upon review of the total circumstances, the director shall issue an interim certification if the director determines to the director's satisfaction that the vendor will resolve such delinquencies and deficiencies.
Notwithstanding the provisions of this act to the contrary, except as may otherwise be provided by section 7 of P.L.1983, c.303 (C.52:27H-66), the authority may, in its discretion, determine whether or not the provisions of this section shall apply to any enterprise zone designated after the effective date of P.L.1985, c.142 (C.52:27H-66 et al.); provided, however, that the authority may make such a determination only where the authority finds that the award of an exemption of 50 percent of the tax imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) will not have any adverse economic impact upon any other urban enterprise zone.
Notwithstanding any other provisions of law to the contrary, after first depositing 10 percent of the gross amount of all revenues received from the taxation of retail sales made by certified vendors from business locations in designated enterprise zones to which this exemption shall apply into the account created in the name of the authority in the enterprise zone assistance fund pursuant to section 29 of P.L.1983, c.303 (C.52:27H-88), the remaining 90 percent shall be deposited immediately upon collection by the Department of the Treasury, as follows:
a. In the first five year period during which the State shall have collected reduced rate revenues within an enterprise zone, all such revenues shall be deposited in the enterprise zone assistance fund created pursuant to section 29 of P.L.1983, c.303 (C.52:27H-88);
b. In the second five year period during which the State shall have collected reduced rate revenues within an enterprise zone, 66 2/3% of all those revenues shall be deposited in the enterprise zone assistance fund, and 33 1/3% shall be deposited in the General Fund;
c. In the third five year period during which the State shall have collected reduced rate revenues within an enterprise zone, 33 1/3% of all those revenues shall be deposited in the enterprise zone assistance fund, and 66 2/3% shall be deposited in the General Fund;
d. In the final five year period during which the State shall have collected reduced rate revenues within an enterprise zone, but not to exceed the life of the enterprise zone, all those revenues shall be deposited in the General Fund.
Commencing on the effective date of P.L.1993, c.144, all revenues in any enterprise zone to which the provisions of this section have been extended prior to the enactment of P.L.1993, c.144 shall be deposited into the enterprise zone assistance fund until there shall have been deposited all revenues into that fund for a total of five full years, as set forth in subsection a. of this section. The State Treasurer then shall proceed to deposit funds into the enterprise zone assistance fund according to the schedule set forth in subsections b. through d. of this section, beginning at the point where the enterprise zone was located on that schedule on the effective date of P.L.1993, c.144. No enterprise zone shall receive the deposit benefit granted by any one subsection of this section for more than five cumulative years.
The revenues required to be deposited in the enterprise zone assistance fund under this section shall be used for the purposes of that fund and for the uses prescribed in section 29 of P.L.1983, c.303 (C.52:27H-88), subject to annual appropriations being made for those purposes and uses.
(cf: P.L.1993, c.367, s.6)
2. This act shall take effect immediately, but remain inoperative until the first day of the second month following enactment.
This bill changes to one year the period, with annual renewals possible, for which a 50% sales tax exemption certification can be issued to a vendor located in an urban enterprise zone (UEZ). Also, the bill provides for a review by the Division of Taxation in order for a vendor located in a UEZ to have its certification as a qualified business issued or renewed. It is unfair to permit certain UEZ vendors who do not file or pay taxes on time to receive indefinitely the benefits of a 50% sales tax reduction. An annual review of the UEZ business at the time it renews its certification will help to better ensure proper tax compliance.
Establishes for qualified urban enterprise zone vendors an annual tax review and certification.