Official Site of The State of New Jersey

Zero Emission Vehicles Exemption

P.L. 2024, c. 19 repeals the Sales and Use Tax exemption on sales, leases, and rentals of zero emission vehicles (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%

Note: The Commissioner of the New Jersey Department of Environmental Protection certifies a list of qualified ZEVs that are affected by this change. See their website for more information.

Sales, Leases, and Rentals Prior to October 1, 2024

The New Jersey Sales and Use Tax Act provides a sales and use tax exemption for zero emission vehicles, 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. The exemption is also NOT applicable to labor or parts for qualified vehicles.

The Sales and Use Tax Act defines "sale" to include rentals and leases. N.J.S.A. 54:32B-2(f). Thus, the exemption is applicable to the sale, rental, or lease of a new or used zero emission motor vehicle delivered prior to September 30, 2024.

Motor Vehicle Dealers, Leasing and Rental Companies, and Other Sellers:

In order to document the exemption for the sale, rental, or lease of a qualified zero emission vehicle, the customer should fully complete an Exempt Use Certificate (Form ST-4) with "N.J.S.A. 54:32B-8.55 " as the statutory reference.

The dealer should complete a Motor Vehicle ZEV Sales and Use Tax Report (Form ST-4EV) for each sale of a qualified ZEV.

Check the Division's website periodically for information on updated filing and payment instructions.

ZEV Frequently Asked Questions

A copy of the bill can be found here.