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Natural Gas and Electricity Sales & Use Tax Exemption
In accordance with P.L. 1997, c. 162 and other laws, as noted, the following entities are exempt from the New Jersey Sales and Use Tax on purchases of natural gas and/or electricity, and related transportation and transmission service:
Utility corporations or persons that were subject to the provisions of N.J.S.A. 54:30A-16 as of 4-1-97 or were formerly or are currently subject to the provisions of N.J.S.A. 54:30A-49 et seq. (Exempt Use Certificate (ST-4
) must be provided to seller);
Cogenerators in operation, or which have filed an application for an operating permit or a construction permit and a certificate of operation in order to comply with air quality standards under PL 1954, c.212 (C.26:2C-1 et seq.) with the New Jersey Department of Environmental Protection, on or before March 10, 1997. (Exemption is limited to purchases of natural gas used in the cogeneration process and the related transportation service (must provide an Exempt Use Certificate (ST-4
) to seller))
Special contract customers for which a customer-specific tax classification was approved by a written Order of the New Jersey Board of Public Utilities prior to January 1, 1998.
Agencies or instrumentalities of the federal government.
International organizations of which the United States of America is a member.
Cemetery companies, pursuant to N.J.S.A 8A:5-10. (must provide an Exempt Use Certificate (ST-4
) to seller).
Amtrak (National Railroad Passenger Corporation) and New Jersey Transit Rail Operations
Limited Dividend Housing Corporations organized under N.J.S.A. 55:16-1 seq., for use at the qualified housing project. (must provide an Exempt Use Certificate (ST-4
) to seller).
Delaware River Port Authority (N.J.S.A. 32:3-13.54)
Urban Enterprise Zone businesses which have been qualified by the New Jersey Economic Development Authority, pursuant to N.J.S.A. 52:27H-60 (must provide UEZ Energy Sales Tax Exemption Certificate (UZ-6) to seller)
Salem County manufacturing businesses which have been qualified by the New Jersey Economic Development Authority, pursuant to N.J.S.A. 52:27H-87.1 (must provide Salem County Energy Sales Tax Exemption Certificate (SC-6) to seller)
The following are examples of invalid claims of exemption for purchases of natural gas, electricity and utility service:
Manufacturing, Processing, Assembling, Refining (N.J.S.A. 54:32B-8.13(a))
The statutory exemption for sales of tangible personal property used directly and primarily in manufacturing, processing, assembling or refining excludes sales of energy and utility service. Thus, ST-4 Exemption Certificates where the purchaser claims the manufacturing exemption are not valid as a basis for exemption. (except as otherwise provided, see # 10 and #11 above)
Exempt Organizations (e.g. religious, educational, charitable) and State / Local Government Entities, Agencies, etc. (N.J.S.A. 54:32B-9)
The statutory exemption for sales to exempt organizations (such as churches and private schools) and the State of New Jersey or its agencies instrumentalities, public authorities, public corporations or political subdivisions excludes the sale or use of energy or utility service. Thus, ST-5 exemption certificates, government entity letters, and purchase orders by a state or local government entity are not valid as a basis for exemption.
Research & Development (N.J.S.A. 54:32B-8.14)
The statutory exemption for sales of property used in research and development excludes energy. Thus, ST-4 Exemption Certificates where the purchaser claims the research & development exemption are not valid as a basis for exemption.
Urban Enterprise Zone Qualified Businesses (N.J.S.A. 52:27H-79)
The statutory exemption for sales made to a qualified business in an urban enterprise zone excludes sales of energy and utility service. Thus, UZ-5 exemption certificates, government entity letters, and purchase orders by a state or local government entity are not valid as a basis for exemption.