Q. What is an Urban Enterprise Zone (UEZ)?
A. The Urban Enterprise Zone is a State of New Jersey program that was established for a limited number of cities in 1983. In Passaic the UEZ program began in August of '94. The program has been expanded a number of times whereas it now covers 34 NJ cities. The UEZ provides qualified businesses in designated zones certain state tax benefits as detailed herein. The program also provides a revenue source for the cities containing the UEZ's. The revenues can be used by the cities for a variety of locally initiated programs to further help the UEZ businesses. Passaic currently receives about $1.2 million per year in these revenues.
The municipal UEZ is administered by a special entity set up specially for that purpose. In Passaic, the UEZ is administered by the Passaic Enterprise Zone Development Corporation.
Q. Where is the Passaic UEZ located?
A. The UEZ boundary has to be both contiguous and contain under 30% of a city's land area. Passaic's UEZ boundary encompasses approximately 95% of all businesses within the city. It includes all the industrial areas and all the retail corridors.
Q. How does a business owner become certified as a qualified business?
A. Just fill out an application. You can dowload and print out the form on the Applications and Forms page. Once you submit it to the Passaic Enterprise Zone Development Corporation office in Passaic City Hall, the local coordinator will review the application and verify that your business is within the zone. Finally, your application is forwarded to the state for its review and approval.
Q. What are the benefits of becoming a certified business in the UEZ?
A. First of all, you have access to the programs and services offered by the PEZDC. This includes loans to enhance your business, free graffiti removal, and much more. Check out the "Programs and Services" page for more information.
Next, you get to charge your customers only 3.5% sales tax on the sale of most tangible goods (as opposed to the standard 7%). That means what you sell will cost your customers less. That will boost your sales.
Members of the UEZ can buy things TAX FREE. What kind of things? Air conditioners, computers, and almost any good or service. Those with under 1mil in revenues can obtain this tax free at the point of purchase. Those over 1mil get the sales tax reimbursed.
A limited number of businesses will also be able obtain corporate tax credits for the hiring of certain qualified employees.
The money you collect in sales tax will go to help your city. As the city's economy becomes more active and robust, your business will benefit as well.
Q. When can a business owner obtain the benefits and exemptions of a UEZ?
A. About six weeks after you submit the application, the NJ Division of Taxation will send you a certificate allowing you to charge the 3.5% sales tax (if applicable) and tax-exempt forms to use to buy goods and services for your business tax free.
Q. How do I take advantage of the UEZ Programs?
A. The process is simple. All you have to do is fill out the proper form (which you can get on the Applications and Forms page), send it to the UEZ and they will work with you on the rest. For more information, check out the Programs and Services page.
Q. How long is my certification good for?
A. UEZ certifications are good for one year. You need to recertify every year. The recertification form is mailed to you about a month before your year is up.
Q. Are businesses ever denied recertification?
A. It is rare that a business that appropriately applies for recertification is denied. In those instances it is typically due to a lack of employment increases. Most businesses need to increase the number of people they have working for them after two years in the program.
