N.J. Stat. § 27:25-16
The exercise of the powers granted by this act shall be in all respects for the benefit of the people of the State, and since the improvement, operation, and maintenance of public transportation services by the corporation constitute the performance of essential governmental functions, neither the corporation nor any wholly owned business corporation or other entity shall be required to pay taxes or assessments upon any public transportation project or any property acquired or used under the provisions of this act, including but not limited to, sales taxes, real property taxes or assessments, corporate franchise taxes or income taxes.
Because of the special nature of such property, the leasing for private use of a part of a structure that is part of any property whose primary use is as a public transportation passenger facility and which is located within an area in need of rehabilitation, as defined in section 2 of P.L. 1977, c. 12 (C. 54:4-3.96), shall not serve to remove the tax exemption of the corporation for the leased portion of the property, and shall not subject the lessee to taxation, the provisions of chapter 29A of Title 54 of the Revised Statutes and P.L. 1949, c. 177 (C. 54:4-2.3 et seq.) notwithstanding.
However, any property owned by the corporation or any wholly owned business corporation or other entity shall be considered "State" property as defined in P.L. 1977, c. 272 (C. 54:4-2.2a), and shall be subject to the in lieu tax payments provided in that act. In order that municipalities not suffer the loss of taxes by reason of the acquisition of property during 1980 by the corporation or any wholly owned business corporation or other entity under the provisions of this act, the corporation shall pay annually in two installments, May 1 and November 1, to each municipality, beginning in tax year 1981, a sum equal to the taxable value of the property, as determined for the tax year 1981, multiplied by the 1981 general tax rate for the municipality where the property is located.
Moreover, the corporation is hereby authorized and empowered, in its discretion, to enter into a voluntary agreement or agreements with any county or municipality, whereby it will undertake to pay an additional fair and reasonable sum or sums annually in connection with any property used primarily as a public transportation passenger facility, a portion of which is leased for private use, which is located within an area in need of rehabilitation, as defined in section 2 of P.L. 1977, c. 12 (C. 54:4-3.96).
Nothing in this subsection shall deprive any municipality of replacement revenues that it would otherwise receive pursuant to sections 19 through 24 of P.L. 1966, c. 139 (C. 54:29A-24.1 et seq.).
N.J.S. § 27:25-16