TRENTON, NJ – The New Jersey Legislature is considering a bill aimed at providing substantial tax relief to small businesses in the state. The proposed legislation, if enacted, will halve the State sales tax rate on retail sales of tangible personal property made by small business enterprises.
Under this bill, small businesses would benefit from a reduced state sales tax rate of approximately 3.3%, significantly lower than the current 6.625%. This initiative is designed to bolster small businesses, making them more competitive against larger corporate entities and fostering organic growth within the state.
The bill defines “small business enterprise” as a business with its principal place of business in New Jersey, which is independently owned and operated, and employs fewer than 50 full-time employees. However, the tax reduction will not apply to sales of motor vehicles, alcoholic beverages, specified digital products, cigarettes, and sales by qualified businesses in Urban Enterprise Zones or those subject to a reduced tax rate in Salem County since August 1994.
Additionally, the bill grants the Director of the Division of Taxation the authority to adopt necessary regulations for implementing these changes, bypassing some procedures of the “Administrative Procedure Act.” These regulations can be effective for up to 180 days from filing.
The proposed act is scheduled to take effect on the first day of the third month following its enactment. This move represents a significant step towards supporting and revitalizing small businesses in New Jersey, especially in the aftermath of economic challenges faced by these enterprises.