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Air Quality, Energy & Sustainability

Drive Green

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.

Zero Emissions Vehicle (ZEV) Tax Exemption

ZEVs sold, rented, or leased in New Jersey are exempt from state sales and use tax. This exemption does not apply to partial ZEVs, including hybrid electric vehicles. ZEVs are defined as vehicles that meet California Air Resources Board zero emission standards for that model year. For a list of qualified ZEV, see the New Jersey Department of the Treasury ZEV Sales Tax Exemption website.

Point of Contact
Brittany Pfeiffer
Bureau of Mobile Sources
New Jersey Department of Environmental Protection
Phone: (609) 292-7953
DriveGreen@dep.nj.gov

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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. 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 on and after May 1, 2004.

Motor Vehicle Dealers, Leasing and Rental Companies and Other Vendors: In order to document the exemption for the sale 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 Commissioner of the New Jersey Department of Environmental Protection (DEP) as qualified Zero Emission Vehicles and thus, are exempt from New Jersey sales and use tax:

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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@dep.nj.gov or call (609)292-7953.

Exempt Use Certificate – Form ST-4 FAQs Motor Vehicle Commission Instructions

Additional SALES EXEMPTIONS AND Programs - ZERO EMISSION VEHICLES (ZEV) (N.J.S.A. 54:32B-8.55)

High Occupancy Vehicle (HOV) Lane Exemption New Jersey Turnpike Authority (Authority) allows qualified hybrid electric and plug-in electric vehicles to travel in the HOV lanes located between Interchange 11 and Interchange 14 on the New Jersey Turnpike. For more information, see the Authority Toll Rates website. (Reference 49 New Jersey Register 3236(b) and New Jersey Administrative Code 19:9-1.24)

Plug-In Electric Vehicle (PEV) Toll Discount Program New Jersey Turnpike Authority's (Authority) Green Pass Discount Plan provides a 10% discount on off-peak New Jersey Turnpike and Garden State Parkway toll rates for drivers of vehicles that have a fuel economy of 45 miles per gallon or higher and meet the California Super Ultra Low Emission Vehicle standard. Vehicles must register with New Jersey E-ZPass. For more information, including application instructions, see the E-ZPass Discount Programs website.

Clean Truck Replacement Program The Regional Truck Replacement Program (Program) through the Port Authority of New York & New Jersey provides funding for up to 50% of the cost to replace a port drayage truck, up to $25,000. Eligible recipients include independent owner operators and licensed motor carriers servicing the port with drayage trucks equipped with Model Year 1996 to 2006 engines. Funding is limited to two replacement trucks per eligible applicant. Additional rules and conditions apply. For more information, see the Program website.

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