New Jersey – Revised UEZ Refund Filing Procedures

SALT Report 1392 – The New Jersey Division of Taxation issued a revised sales and use tax notice regarding changes that affect Urban Enterprise Zone (UEZ) businesses and point of purchase sales tax exemptions. The changes permit any certified qualified UEZ business to claim a sales tax exemption at the point of purchase for eligible exempt purchases of tangible personal property and services that are used or consumed exclusively at the UEZ business location when an Urban Enterprise Zone Exempt Purchase Certificate (Form UZ-5) is issued to its sellers.

Changes to the UEZ Refund Process:

  • All refund claims that are based on the UEZ purchase exemption are subject to a one-year statute of limitations. The four-year statute of limitations period for refund claims for the erroneous payment of sales or use tax no longer applies; and
  • As of April 1, 2011, the one-year statute of limitations no longer applies from the date of sale. Rather, the one-year statute of limitations applies from the date of payment of the tax.

Transactions on or After April 1, 2011

Use Tax—Self-assessed or audit assessments: UEZ businesses that did not qualify for the point-of-purchase exemption no longer have a use tax obligation for UEZ eligible exempt purchases where no tax was collected or where tax was collected at a lesser tax rate than that of New Jersey. Payments made to satisfy audit assessments are included in the shortened time period for filing refund claims. This means that a UEZ business that pays an assessment after April 1, 2011, has one year from the date of payment to file a refund for any taxes paid for purchases that were eligible for exemption under the UEZ law.

Improperly Paid Tax: Refunds requested when certificates are not presented or accepted are now subject to the shortened time period for filing refund claims. Therefore, a UEZ taxpayer that improperly pays tax at the point of purchase after April 1, 2011, has one year from the date of payment of the tax to file a refund for any portion of the tax paid for eligible UEZ exempt purchases.

Sales and use tax refund claims submitted by any qualified UEZ business should be filed using Form A-3730-UEZ.  Additionally, refund claims based on exemptions other than the UEZ purchase exemption such as exempt use (Form ST-4) or resale (Form ST-3)) may be submitted using Form A-3730 within four years of payment of the tax. The amended UEZ law does not affect the statute of limitations for filing a refund based on these exemptions.

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