How does a reduced rate vendor qualify?
First the vendor must be designated as a qualified business within a zone or district. Then, by separate application, the vendor must apply to the Division of Taxation on Form UZ-1 for authority to collect tax at the reduced rate. If the qualified business is a retailer and exhibits and has an inventory of items for retail sales, and is not primarily a catalog or mail order business, the application is approved and a UZ-2 Certificate is issued. No business may collect sales tax at the reduced rate without a currently effective UZ-2. Recertification of the UZ-2 is automatic, unless the business loses its “qualified business” status or changes ownership or form, etc. Businesses have to reapply each year for qualified business status.
