LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
SENATE, No. 3837
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: JUNE 30, 2023
SUMMARY
Synopsis: Clarifies process for administrative appropriations to UEZs; makes
appropriation.
Type of Impact: State Revenue and Cost Increases.
Agencies Affected: Department of the Treasury.
Office of Legislative Services Estimate
Fiscal Impact Urban Enterprise Zones
100 percent Increase in full Sales Tax Collections for
Annual State Revenue from UEZs Recreational Cannabis and Related Supplies in 37 UEZs
State Cost Increase $82.5 million
 The Office of Legislative Services (OLS) concludes that the bill will result in an increase in
State revenues associated with a 100 percent increase in the sales tax collected in Urban
Enterprise Zones (UEZs) for recreational cannabis and cannabis-related supplies. The bill
requires tax revenues on the sale of recreational cannabis items to be credited to the Cannabis
Regulatory, Enforcement Assistance, and Marketplace Modernization Fund and the Underage
Deterrence and Prevention Account within the fund.
 The bill makes a General Fund appropriation of $82.5 million to the Enterprise Zone
Assistance Fund for the fund’s purposes.
BILL DESCRIPTION
The bill clarifies the process for appropriating revenue under the State UEZ Program for use
within UEZs. Specifically, the bill appropriates $82.5 million to the Zone Assistance Fund from
the General Fund and excludes the sales of medical and recreational cannabis, and related supplies
from the 50 percent sales tax exemption within UEZs, as is currently the case for alcoholic
beverages and some other retail sales.
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
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FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that the bill will result in an increase in State revenues associated with a
100 percent increase in the sales tax collected in UEZs for recreational cannabis and cannabis-
related supplies. Current law provides that qualified businesses within a UEZ may charge sales
tax at half of the regular rate on certain retail sales. The bill provides that neither medical nor
recreational cannabis, nor cannabis supplies, qualify for the reduced sales tax rate. However,
pursuant to current law, medical cannabis is not subject to sales tax. The bill will therefore,
increase the amount of sales tax to be collected for recreational cannabis and cannabis supplies
from 3.3125 percent to 6.625 percent within UEZs. The bill requires tax revenues on the sale of
recreational cannabis items to be credited to the Cannabis Regulatory, Enforcement Assistance,
and Marketplace Modernization Fund and the Underage Deterrence and Prevention Account
within the fund. The OLS is unable to estimate the number of businesses that are located within
UEZs which sell or will sell recreational cannabis or cannabis supplies or the prices of these
products and, therefore, cannot predict the specific increase in sales tax to be collected pursuant to
the bill.
The bill also clarifies that the gross amount of all revenues from the taxation of retail sales,
which excludes sales of motor vehicles, alcoholic beverages, cigarettes, manufacturing machinery,
energy, and cannabis, are required to be deposited in the Enterprise Zone Assistance Fund for the
fund’s purposes.
The bill also makes a General Fund appropriation of $82.5 million to the Enterprise Zone
Assistance Fund for the fund’s purposes. The OLS notes this appropriation is equivalent to the
maximum FY 2023 statutory appropriation.
Section: Local Government
Analyst: Abigail Stoyer
Associate Fiscal Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).


Statutes affected:
Introduced: 52:27H-80, 52:27H-88, 52:27H-98