CCSNJ Supports UEZ Reform
Friday, January 07, 2011

M E M O R A N D U M

To: Members of the New Jersey State Senate

From: Maria Patouhas, Manager, Government Relations

Date: January 6, 2011

RE: A-1559 (Lampitt/Coutinho/Evans)

The Chamber of Commerce Southern New Jersey supports A-1559 (Lampitt), which expands the number of zone-qualified businesses eligible for the point of sale sales tax exemption.

The rebate procedure that was established in 2006 – which the Chamber opposed – eliminated the point of sale sales tax exemption for many businesses in UEZs. Many businesses must now pay the entire sales tax and apply to the state for a rebate, which is a considerable administrative burden on businesses located in UEZs. For one member company, the cost just to copy invoices and checks to obtain their reimbursement is upwards of $10,000 per year. Additionally, this company devotes at least 120 man hours per year to fulfill the documentation requirements, which brings the cost of meeting the audit requirements to $30,000. Finally, the company does not receive its reimbursement from the State for another five to six months, which has cash flow implications.

Restoring the point of sale tax exemption will relieve this burden for companies, as well as for the state to administer the program. The Urban Enterprise Zone program remains an important one in Southern New Jersey, as it encourages businesses to remain and grow in areas that are economically challenged. The program encourages businesses to provide jobs to local residents and in many ways promotes the historical manufacturing base of our State. The Chamber believes that this legislation will support those goals and reaffirms the State’s commitment to fostering economic growth in partnership with the private sector.

For these reasons, we respectfully urge you to vote “yes” on A-1559 (Lampitt).