TRENTON – The Sales and Use Tax Review Commission recommended the Legislature vote against the addition of a new Urban Enterprise Zone in the state.
Commissioners voted unanimously to recommend that Linden in Union not be New Jersey’s 33rd UEZ. If the legislation, A3042/S2017, were signed into law that would allow businesses in Linden to collect half of the sales tax normally charged. It would cost the state approximately $22 million a year, commissioners said.
Proponents of UEZs argue the exemption could give a boost to businesses in troubled business areas.
Prior to voting not to recommend the adoption of the bills, one commissioner noted a consulting report that recommended New Jersey do away with all of its UEZs, saying the exemption has shown to do little in the way of improving troubled business areas as intended.
The bills are being sponsored by the three 22nd District legislators, Democrats Sen. Nicholas Scutari, and Assembly members Linda Stender and Jerry Green.
The commission, which examines proposed legislation that seeks tax breaks for various goods or services, and makes recommendations to the Legislature whether it feels the bills should be passed, also took action on several other proposals.
Compressed natural gas
Commissioners recommended approval of a bill, S2085, that would provide an exemption on compressed natural gas for commercial buses. The commission voted 5-0 in favor of recommending the proposal, with one member abstaining.
A representative of an Atlantic City organization that operates commercial buses argued that running the vehicles on natural gas is cheaper and more environmentally friendly than traditional motor fuel. However, the representative, Keith Davis, said commercial businesses, which were exempt under traditional fuel, are essentially being penalized for using natural gas without having the proposed exemption in place.
Davis said the state “should be encouraging and embracing” these sort of environmental improvements.
The compressed natural gas bill was the only proposal the commission recommended the Legislature adopt during today’s teleconference meeting.
Artwork
The commission opposed recommending a bill, A3146, that would provide a 50 percent sales tax exemption on sales of so-called “one of a kind” art.
The bill defines eligible artwork as an original painting, sculpture or other kind of work not generally intended for mass production except for limited editions.
Commissioners expressed concern over what they argued is a vagueness of what qualifies as one of a kind art, as well as a provision in the proposal that commissioners feared would require only the people not participating in the exemption to file additional paperwork with state tax officials.
“If it’s going to be voluntary the burden needs to be on the seller who wants to claim this exemption,” said Commissioner Deborah Bierbaum.
The commission voted unanimously against recommending the legislation, which they said would cost the state between $2.7 million and $2.9 million annually.
Pet medications
Commissioners voted unanimously to not recommend A2766, which would exempt completely the sales of pet medications. It’s estimated the measure would cost the state $2 million annually.
Commissioner Susan Feeney called the legislation “very problematic,” saying the definition of a pet can be open to interpretation.
“(It’s) really going to open up a can of worms,” she said, explaining it would likely expand past household pets like dogs and cats, suggesting that pot-bellied pigs could be considered household pets to some people.
The sponsors of “Fritz’s Law’’ are Assembly members Erik Peterson, (R-23), Clinton, and Craig Coughlan, (D-19), Woodbridge.
Other bills
Among other bills the commission voted not to recommend:
S1868: This bill would provide an exemption on services done on computer software.
This bill points out that while sales of some “canned’’ software are exempt, services performed on that software, such as maintenance, are not
A2855: This bill would exempt charges for residential storage space and fees or dues for health clubs. Earlier incarnations draw a thumbs-down recommendation from the commission.
S1993: This bill, which would phase out the sales tax on certain initiation or membership fees, drew a negative response from the commission in a previous legislative session.
S2890: This bill would exempt from the sales tax the installation of rainwater capture systems. It also would provide tax credits and prohibit a governmental agency from imposing fees on their installations. It is sponsored by Assemblyman Timothy Eustace, (D-38), Paramus.
