Exempts receipts from sales of materials, supplies, and services for certain affordable housing projects from sales and use tax.

Contractors get affordable housing sales tax relief

The law exempts qualifying contractor and repairman purchases of materials, supplies, and services from New Jersey sales and use tax. Purchases must be used only to build, improve, alter, or repair property owned by eligible groups. These include specified tax-exempt organizations and qualified businesses in enterprise zones. Certain urban renewal entities also qualify: they must fully own a qualified operating company and share its enterprise zone. Eligible housing owners include sponsors with New Jersey Housing and Mortgage Finance Agency financing plus other federal, state, or local subsidies needed to make projects financially feasible. Sponsors also qualify when every project unit is reserved for residents with moderate, low, or very low incomes. Buyers must follow the Division of Taxation director’s rules and use required forms. The exemption covers sales starting the first day of the second month after enactment. The law does not require savings to reach residents.