Electric Vehicle Tax Exemption

New Jersey's zero emission vehicle sales tax exemption was repealed effective October 1, 2024, with a phase-out schedule: you'll pay 3.3125% sales tax on ZEV purchases from October 1, 2024 through June 30, 2025, then the full 6.625% rate applies after July 1, 2025. To document a qualified zero emission vehicle purchase, rental, or lease during the transition period, complete an Exempt Use Certificate (Form ST-4) and reference N.J.S.A. 54:32B-8.55.

If you sell, lease, or rent zero emission vehicles certified to California Air Resources Board standards, you must apply the appropriate sales tax rate based on transaction date: zero tax through September 30, 2024; 3.3125% from October 1, 2024–June 30, 2025; and 6.625% thereafter. Customers should submit a completed Exempt Use Certificate (Form ST-4) to document the transaction, and note that the exemption does not apply to hybrids, labor, or parts.

The New Jersey Division of Taxation administers a declining sales tax exemption for zero emission vehicles under P.L. 2024, c. 19, targeting passenger ZEVs certified to California Air Resources Board standards. The exemption, available since May 1, 2004, phases out over nine months with a reduced rate of 3.3125% from October 1, 2024–June 30, 2025, before reverting to the full 6.625% state rate. Revenue is collected through standard sales tax mechanisms; the New Jersey Department of Environmental Protection maintains the certified ZEV list.