Notice to Certified Vendors
Urban Enterprise Zone Program Delivery Requirements for
the 3.5% Sales Tax Rate
The Urban Enterprise Zone Program offers a partial sales tax exemption for certain retail sales made by certified vendors. N.J.S.A. 52:27H-80. In order for a vendor to offer the 3.5% sales tax rate to a purchaser who makes an in-person purchase at a vendorís place of business in a zone it is required that the purchaser accept delivery at the vendorís place of business in the zone or that the vendor deliver the goods to the purchaser from the vendorís business location in the zone. N.J.A.C. 18:24-31.4(e) provides as follows:
All sales made by a qualified and certified vendor must be made from his place of business within an enterprise zone, that is, either the purchaser must accept delivery at the vendorís place of business within an enterprise zone, or the vendor must deliver the tangible personal property from its place of business within an enterprise zone. Only receipts from sales which originate and are completed by the purchaser in person at the vendorís place of business within an enterprise zone qualify for the reduced rate of sales tax; provided, however, that after a sale has been completed within an enterprise zone, the vendor may deliver the tangible personal property to the purchaser at a location outside an enterprise zone. 1. Receipts from mail order, telephone, telex and similar sales transactions are subject to sales tax at the regular rate where delivery is made to a location within the state.
Example 1. A consumer goes to a UEZ certified retail building supply business to make a purchase of materials. The retailer does not have all the materials in stock and agrees to order from another source or obtain the materials from another location operated by the retailer.
In order for the transaction to be taxed at the reduced rate the materials must come to rest and be handled by the employees at the vendorís location in the zone. Either the purchaser must come to the vendor and pick-up the materials or the vendor must deliver the materials from the zone location.
Example 2. A vendor has two certified retail stores in different UEZ zones. A purchaser makes an in-person order for goods at one location but the vendor does not have the goods at that location. The goods, however, are in stock at the second location.
Each reduced rate transaction must be originated and completed at the same UEZ location that is certified under the program. Thus, the goods that are offered at the reduced rate must be ordered and delivered from the same location.