City Revenue Generation

Introduction

In an effort to encourage business in the Urban Zones of New Jersey, the State Legislature enacted legislation to change the amount of Sales Tax collected in Urban Zones.

The standard 6 percent State Sales Tax is reduced to a 3 percent Tax Rate for participating urban cities. The 3 percent Tax goes directly to that specific city. The State forgoes its portion of the Sales Tax (the other 3 percent), in order to help subsidize and strengthen urban business opportunities.

To participate, a business needs to be local and based geographically in an Urban Zone. The business needs to submit the proper paperwork to the State, County, and Urban city. Once enrolled, that business is exempt from collecting the 6 percent NJ State Sales Tax and can publicize the 3 percent local Urban Enterprise Tax.

 

Goal

RUTAP focused on the Elizabeth, NJ Urban Enterprise Zone. A study was conducted and determined that over 250 companies with $1 Million in sales were not participating in the Urban Enterprise 3 percent Tax program. RUTAP's goal was to design a participation program for the 250 companies currently not using the Urban Enterprise Program.

 

Achievements

RUTAP organized a letter based marketing program and provided technical assistance to the local Elizabeth urban enterprize zone administrator. In the time span of five months, those 250 companies were made aware of the Urban Enterprise program and were encouraged to join.

 

Contribution

The companies received accurate technical advice from RUTAP, smoothing the process. RUTAP "sold" the program, encouraging these companies to take the time to apply. The companies benefit from a lower Sales Tax, effectively reducing their prices by 3 percent without damaging their profitability. The city of Elizabeth gains valuable Tax Revenues to reinvest into the local government and infrastructure.

To find out more, please contact RUTAP.