Under the Urban Enterprise Program, the sales tax for shoppers patronizing businesses in dozens of New Jersey cities has been cut in half for decades. But for five cities who signed on to the program first, in 1986, that sales tax cut came to an end last month.
The program was set to expire for five cities—Bridgeton, Camden, Newark, Plainfield, and Trenton—as of Jan. 1, but S2670/A4189 would have extended the program for those cities for two years. When Gov. Christie hadn’t taken action on the bill by the end of 2016, the tax rates in those cities rose at the beginning of the year, but Christie followed up by conditionally vetoing the measure last month.
In addition to the decreased sales tax rate, the program also provides financial assistance, subsidized unemployment insurance, and energy sales tax exemptions for businesses in urban areas, with the aim of boosting business activity in participating urban areas. However, Christie said he vetoed the bill because of low participation in the program, which ultimately impacted state revenues without providing significant benefit. He also conditionally vetoed a proposed 10-year expansion of the program in 2016. While the program is still in effect for other cities around the state, other expiration dates are approaching in the coming years.
Businesses in Bridgeton, Camden, Newark, Plainfield, and Trenton must now charge the full 6.875 percent sales tax, up from the 3.5 percent reduced rate they were charging.