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Understanding NJ’s Sales Tax Exemption for Zero Emission Vehicles

Oct 08, 2018

The New Jersey Sales and Use Tax Act provides a Sales and Use tax exemption for zero emission vehicles (ZEVs), which are vehicles certified pursuant to the California Air Resources Board zero emission standards for a particular model year. The exemption is NOT applicable to partial zero emission vehicles, which include hybrids like the Toyota Prius and Honda Civic Hybrid. Also, the exemption is NOT applicable to labor or parts used to repair such vehicles.

The definition of “sale,” as used in the law, includes rentals and leases of ZEVs. Accordingly, the exemption from New Jersey Sales & Use Tax applies to the sale, rental, or lease of a new or used ZEV, on an after May 1, 2004.

In order to document the exemption for the sale, rental or lease of a qualified ZEV, the customer should complete an Exempt Use Certificate (ST-4) and insert the statutory reference “N.J.S.A. 54:32B-8.55” on the front of the exemption certificate.

To check to see whether or not a vehicle has been certified by the New Jersey Department of Environmental Protection (NJDEP) as a qualifying Zero Emission Vehicle and exempt from New Jersey Sales & Use Tax, go to: