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The Urban Enterprise Zone (UEZ) is a state program established under the Urban Enterprise Zone Act. The number of designated UEZs is determined by legislative action, but the number of permissible zones has been increased on a relatively regular basis since the mid-1980s. Five zones were automatically designated in the original legislation (Newark, Jersey City, Trenton, Camden and Elizabeth). There are now over 20 zones throughout New Jersey, with some zones shared by two communities (Vineland-Millville and Asbury Park-Long Branch).
The economic development incentives in Urban Enterprise Zones range from recaptured retail sales tax (reduced by 50% over more affluent neighboring towns) to tax free purchase of materials and equipment for certified (employing at least one additional employee per year of eligibility) businesses and income tax credits for employing persons residing within the zone. More importantly, the Local Redevelopment and Housing Law and the Long Term and Short Term Tax Abatement and Exemption Acts enable both long term and short-term property tax abatements within a designated UEZ.
The boundaries of a UEZ are established by including businesses within Census Block Groups that exhibit high unemployment, low income, high percentage of residents below the poverty level, etc. The New Jersey Urban Enterprise Zone Authority that oversees the municipal UEZs must approve the boundaries. Once designated, the boundaries can only be modified every five years. Each designated UEZ has a 20-year life, with the amount of recaptured sales tax decreasing by 20 percent each five years until the State retains all sales tax revenue from certified businesses. UEZs are managed by a Zone Development Corporation (ZDC), which is a nonprofit 501, c-6 organization. A board of trustees appointed by the municipal governing body manages each ZDC.
For more information on Urban Enterprise Zones, call 609-777-0885.