TRENTON – In an effort to help New Jersey’s small business economy continue to recover from the adverse effects of the COVID-19 pandemic, the Senate Economic Growth Committee today advanced legislation sponsored by Senator Vin Gopal and Senator Nicholas Scutari that would provide a tax credit to qualified small employers in industries that were particularly impacted by the public health emergency. The employers would be allowed a tax credit for wages paid to qualified employees, and would be available for taxable years beginning or privilege periods ending in 2020 and 2021.
“Across the board, New Jersey’s small business sector sustained considerable losses during the course of the COVID-19 health emergency. Small employers had to cut workers, hours and services. Many of these establishments didn’t survive at all, and those who did continue to fight an uphill battle to get their businesses back up running and fully staffed. These tax credits will provide a measure of relief to help ensure this most vital part of our state’s economy makes a full and speedy recovery,” said Senator Gopal (D-Monmouth).
The bill, S-3418, would define a small employer to mean a business entity:
- a) including all entities related by common ownership or control, that is independently owned and operated;
- b) that has a specific North American Industry Classification System (NAICS) code of 44, 45, 62, 71, 72, or 81; and
- c) had an average weekly number of full-time employees of not more than 100 employees during the taxable year.
“Small businesses keep New Jersey running. They provide solid, good-paying jobs to local residents, and enliven and stabilize our communities. Many of these businesses answered the call above and beyond during the worst months of the COVID-19 pandemic, and this tax credit will provide them a bit of a cushion as they continue to rebuild and rehabilitate their businesses,” said Senator Scutari (D-Union).
Under the bill, the credit would be equal to 10 percent of wages paid by the qualified small employer to a qualified employee.
The bill was passed out of committee by a vote of 5-0.