NJ CAR previously announced that the Division of Taxation (e.g., “the Division”) began phasing out the Sales and Use Tax exemption on retail purchases of zero emission vehicles (ZEVs).
This phase-out process will occur in two stages:
- Beginning October 1, 2024, through June 30, 2025, a tax rate of 3.3125% will be imposed on the sale of ZEVs
- As of July 1, 2025, ZEVs will be taxed at the full statutory rate, which is currently 6.625%
On October 2, 2024, the Division released Form ST-4ZEV, to calculate the Sales Tax due on sales, rentals, or leases of ZEVs, and submit it directly to the Division of Taxation during the first portion of the phase-out from October 1, 2024, through June 30, 2025. Dealers can then use the information on the completed ST-4ZEV forms to correctly file their monthly or quarterly Sales Tax returns.
ZEV dealers must mail the completed ST-4ZEV forms to the Division and keep a copy for their records. Dealers can mail in that form on the same frequency that they mail in the required ST-10 form for non-resident exemption.
The Division has released a REVISED ST-4ZEV form with clearer instructions and additional calculations to account for the 3.3125% rate on the vehicle, doc fee, and hard aftermarket items that become a part of the vehicle and soft aftermarket items such as gap waivers; tire and wheel; and service contracts that are taxed at the full 6.625% rate.
- Treasury has recently added details on Sales Tax for ZEVs to their website: NJ Division of Taxation – Sales Tax Exemption – Zero Emission Vehicles Exemption
- There is also a FAQs page that dealers and the public may find helpful: NJ Division of Taxation – Sales Tax Exemption – Zero Emission Vehicles Frequently Asked Questions
If you have any questions on anything discussed above, please contact NJ CAR Director of Legal & Regulatory Affairs Greyson Hannigan at [email protected] or (609) 883-5056, Ext. 340.