OFFICIAL SITE OF THE STATE OF NEW JERSEY
Sales and Use Tax Exemption
Legislation enacted in New Jersey in January 2004 provides a sales tax exemption for zero emission vehicles (ZEVs), which are battery-powered or fuel-cell powered vehicles pursuant to the California Air Resources Board zero emission standards for the model year.
On 6/28/24 the Governor signed into law P.L. 2024, c.19 which repeals the sales and use tax exemption on sales of ZEVs. Beginning October 1, 2024, sales of ZEVs are subject to tax, and the exemption will be phased-out over nine months. The schedule for the phase-out is as follows:
| Period when Zero Emission Vehicles are sold | Tax Rate |
| October 1, 2024 to June 30, 2025 | 3.3125% |
| July 1, 2025 and on | 6.625% (or regular sales tax rate) |
A copy of the bill can be found here: https://www.njleg.state.nj.us/bill-search/2024/A4702/bill-text?f=A5000&n=4702_I1
Sales Tax Exemption – Zero Emission Vehicles (ZEV) (N.J.S.A. 54:32B-8.55)
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 the model year.
The exemption is NOT applicable to partial zero emission vehicles, which includes hybrids such as the Toyota Prius and Honda Civic Hybrid, nor does it apply to plug-in hybrids such as the Chevy Volt or Toyota Prius Prime. The exemption is also NOT applicable to labor or parts for qualified vehicles.
The definition of “sale” in the law includes rentals and leases. Thus, the exemption is applicable to the sale, rental or lease of a new or used zero emission motor vehicle. For light duty vehicles and neighborhood electric vehicles, the exemption is effective on and after May 1, 2004. For medium duty and heavy duty vehicles, the exemption is effective on and after March 1, 2021.
Motor Vehicle Dealers, Leasing and Rental Companies and Other Vendors: In order to document the exemption for the sale, lease or rental of a qualified zero emission vehicle, the customer should complete an Exempt Use Certificate (ST-4) and insert the statutory reference “N.J.S.A. 54:32B-8.55.”
The following vehicles have been certified by the New Jersey Department of Environmental Protection (DEP) as qualified Zero Emission Vehicles and thus, are exempt from New Jersey sales and use tax:
How to receive your sales tax exemption:
For new vehicles: Remind the dealership to complete an Exempt Use Certificate that you should keep a copy of. Make sure to cite N.J.S.A. 54:32B-8.55 as the statutory reference.
For used vehicles: The person you are buying the vehicle from should complete the Exempt Use Certificate citing the above reference. When you go to register your vehicle at the Motor Vehicle Commission, bring the Certificate. You will need to present it at that time to be exempt from paying sales tax.
Email us at Drivegreen@njdepwptest.net or call (609)292-7953.
Exempt Use Certificate – Form ST-4
Motor Vehicle Commission Instructions
If you have been charged sales tax on your EV purchase, rental, or lease, please complete the following form and submit to the Division of Taxation, Sales Tax Refund Section as described in the instructions on the form for a refund.