Lakewood UEZ: the 3.3125% sales tax and how a business qualifies

Lakewood is one of 32 active zones in New Jersey. Its old end date, October 31, 2025, was replaced by a 2021 state law that lets current zones keep their status for 10 years. The zone is in use: the state UEZ board’s October 14, 2026 agenda listed three Lakewood projects.

The numbers to know

• 3.3125% is the sales tax a certified zone store charges on goods that qualify. It has applied since January 1, 2018.
• 6.625% is the regular New Jersey rate. It still applies to services, meals, cars, alcohol, and online orders delivered in New Jersey.
• $100,000 is the yearly limit on tax-free purchases for a certified business.
• 7.02 square miles of Lakewood is inside the zone. It is not the whole township.
• 32 zones are active in New Jersey, covering 37 towns. The state cannot add new ones under current law.

For shoppers: when you pay 3.3125%

You pay the lower rate only when all three of these are true:

• The store has a UZ-2 certificate for that location. The certificate names the location it covers.
• The item qualifies. Services, meals and the items listed below do not.
• You buy in person at that store.

You do not have to live in Lakewood. The state says any buyer can get the lower rate at a certified store.

Phone, mail and online orders delivered inside New Jersey pay the full 6.625%. A store can deliver outside the zone at the lower rate, as long as the sale was made at the store.

Always the full rate

• Cars and other motor vehicles
• Alcohol and cigarettes
• Cannabis, since March 2024
• Manufacturing machinery and equipment
• Energy
• Services
• Prepared food and meals
• Hotel rooms, admissions, parking and club memberships
• Digital property and magazine subscriptions

On a car repair, labor pays the full rate and parts can pay the half rate. On any bill that mixes goods and services, the goods get the half rate only when they are listed separately. The state’s list of excluded sales dates from 2011, so check with the Division of Taxation about anything unusual.

For business owners: how to qualify

The state lists 4 basic requirements. Your business must be:

• Registered to do business in New Jersey.
• Located inside the zone.
• Up to date on New Jersey taxes.
• Certified by the state UEZ program.

To charge 3.3125%, you also need a UZ-2 certificate and a real store that shows and sells goods. A business run mainly by catalog, mail or internet does not qualify. The store must sit in a census block group that was inside the zone on August 17, 2021.

The hiring rules

A business that opened in the zone after the zone began needs at least 25% of its full-time staff to meet one of these. Lakewood’s zone began November 1, 1994.

• Lives in Lakewood or another town with a zone.
• Was unemployed for 6 months or more before being hired, and lives in New Jersey.
• Was on New Jersey public assistance for 6 months or more before being hired.
• Counts as low income under federal job-training rules.

The law also says the business must create new jobs in the town. The state’s 2012 instructions say a business with 0 to 5 full-time workers does not have to hire more. Those instructions are old, so check with the state UEZ office.

Some businesses with fewer than 50 employees can invest in the zone instead of hiring. They must have been in business there for at least a year before the zone began or grew to include them, and need an agreement with the township that the state approves. The minimum is $5,000 a year for 10 or fewer employees, or $500 for each employee if you have more than 10.

Tax-free buying for your business

A UZ-5 certificate lets a certified business buy goods and most services for its zone location without sales tax. Only the first $100,000 of purchases each calendar year is tax-free, which is worth up to $6,625 a year. The limit starts over every January 1.

Motor vehicles, energy, phone service and utilities are not covered. Once you pass $100,000, you pay sales tax again. If a seller does not charge it, you must pay it to the state yourself as use tax.

Other certificates and benefits

• UZ-4, for building work. Your contractors can buy building materials tax-free. All of them together share one $100,000 limit a year. There is no limit for a new building, or for a project that costs at least 50% of the building’s value.
• UZ-6, for energy. Only for big manufacturers: at least 250 workers in the zone, with at least half working directly in manufacturing.
• Closed to new applicants. The zone employee tax credit and the corporation business tax exemption.
• Help from other state agencies, including hiring help from the New Jersey Department of Labor’s One Stop Centers.
• Property tax. Lakewood’s flyer lists a 5-year property tax phase-in for new buildings or additions. Land tax is still paid in full. The flyer is undated, so confirm the terms with the township.

Lakewood’s own loans and grants

Lakewood’s local UEZ office says it offers business loans and grants to certified UEZ businesses. The terms posted on its website, from July 2022, included:

• Microloans of up to $35,000 at 3.5% over 10 years.
• Expansion loans of up to $20,000 or $50,000 at 2.5% over 5 years, with part of the loan forgiven for hiring Lakewood residents.
• Technology help and bank-fee help of up to $5,000 each.
• An employee retention incentive of $1,500 per employee, up to $4,500 every 3 years.

The loans were secured by real estate. Most of these programs were for businesses with under 10 employees and at least one full-time worker who lives in Lakewood, and funds went first come, first served. Check with the Lakewood UEZ office for what is open now and at what terms. Certification also makes a business eligible to apply for these local loans and grants, Lakewood’s sign-up guide says. For the grants open right now, Lakewood’s included, see grants open now. For new programs as they open, see our grants and loans news.

Filing, records and penalties

• Every month: a business that charges the reduced rate files a UZ-50 sales tax return by the 20th of the following month. The state publishes a tax table for the 3.3125% rate, form ST-475U.
• Every year: an annual report. By law, any business that gets benefits must confirm every year that it still qualifies.
• Every 3 years: apply again to stay certified.
• Records: keep detailed records of every tax-free purchase, including your contractors’, and list them in the annual report. The state audits how zone businesses use their UZ-5 and UZ-4 certificates.

Using a UZ-5 or UZ-4 certificate past the $100,000 limit means owing the tax plus penalties and interest. Not filing the yearly confirmation, or lying on it, can bring a fine of up to 10 times the benefits received and up to 2 years in prison.

Certification also has a time limit. For a business already certified on August 17, 2021, it ends with the 10th state fiscal year after that date. For a business certified later, it ends with the 10th state fiscal year after the fiscal year it was first certified. Once it ends, the business can never be certified again. The state can also cancel a certification at any time if the business stops following the rules.

Common mistakes

• Charging 3.3125% on online, phone or mail orders shipped inside New Jersey.
• Charging it on services, meals, alcohol, cigarettes, cars or energy.
• Not listing goods and services separately on the same bill.
• Filling a reduced-rate order from another store or a warehouse. Each sale must start and finish at the same certified store, and goods must arrive there first.
• Using the UZ-5 or UZ-4 after the $100,000 limit.
• Missing the annual report or the 3-year recertification.
• Letting certification expire, which cannot be undone.

Sources

Official state and township pages, checked November 8, 2026.

State law

• New Jersey Urban Enterprise Zones Act, updated through P.L.2021, c.197 (PDF)
• P.L.2021, c.197, the 2021 reform law
• State summary of the 2021 law (PDF)
• P.L.2023, c.282, which put cannabis at the full rate
• P.L.2024, c.80 (PDF)
• Program rules, N.J.A.C. 5:120, 2017 copy (PDF)

New Jersey Department of Community Affairs

• About the UEZ program
• Zone offices, with Lakewood listed
• Zone end dates, 2018 (PDF)
• Business benefits
• Business requirements
• How to get certified
• Getting started in Premier Business Services (PDF)
• Certification instructions, 2012 (PDF)
• Sales not eligible for the reduced rate, 2011 (PDF)
• Law change notice for UEZ businesses, November 2021 (PDF)
• State UEZ board agenda, October 14, 2026 (PDF)
• Address lookup map

New Jersey Division of Taxation

• UEZ sales tax overview
• The 3.3125% rate and its tax table
• UEZ certificates
• Delivery rules for the 3.3125% rate
• Questions on the $100,000 limit
• Energy exemption for zone manufacturers
• New tax laws, including the UEZ changes

Lakewood Township

• Lakewood UEZ office
• Lakewood UEZ zone map (PDF)
• Loan and grant terms, July 2022 (PDF)
• UEZ tax breaks flyer (PDF)