New Jersey Sales and Use Tax: Exemptions and Exclusions: The Urban Enterprise Zone Exemption
Exemptions are persons, transactions or items that otherwise fall under the imposition language of the taxation statute, but are not
taxed because they are specifically identified in the statute or regulations as exempt from the tax. For example, the statute may
impose a tax on all sales of tangible personal property, but a separate provision may exempt sales of groceries. An exemption certificate generally is required to substantiate an exemption claim.
Exclusions are persons, transactions or items that fall outside the reach of the tax imposition statute. Put differently, exclusions are items that do not meet the definition of a taxable sale or use. No specific "exemption" is needed for these items because they did not
fall within the scope of tax imposition in the first place. Exemption certificates generally are not required for exclusions because they
were not otherwise taxable.
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