Measure Would Create Tax Credit Incentive for Retained and New Jobs
TRENTON – A bipartisan bill sponsored by Senator Raymond J. Lesniak which would create the “Grow New Jersey” program to provide tax incentives for companies which maintain existing employment levels and create new jobs in New Jersey received final approval in both the State Senate and the General Assembly today.
“With the latest unemployment figures released today, although we’ve made modest gains, we have to do more to cut into the 9.1 percent unemployment rate which is hanging over the State of New Jersey like a shroud,” said Senator Lesniak, D-Union, who fought to have job creation – and not just job retention – included in the bill to move New Jersey’s economic recovery forward. “The Grow New Jersey tax credit program represents an innovative approach to spur economic activity and encourage business owners to create the jobs that unemployed New Jerseyans need. In conjunction with other business incentive programs like NJ BEIP (Business Employment Incentive Program), the tax increment financing law, and the new Urban Transit Hub program, we’re finally creating an economic climate which encourages business growth rather than discourages it.”
The bill, S-3033, would establish the “Grow New Jersey” tax credit business incentive program to stimulate economic investment and private job creation. Under the bill, businesses in qualifying development zones would be eligible for the tax credits if they make or acquire a capital investment of at least $20 million, and create or retain at least 100 full-time employees. Beyond the employment and investment eligibility standards, the business’s CEO would be required to certify that any retained jobs are at risk of leaving the state and any new jobs wouldn’t be created without the “Grow New Jersey” credit. Finally, the business would have to demonstrate to the New Jersey Economic Development Authority (EDA) that the tax credit will yield a net positive benefit for the state.
Qualifying businesses would be able to receive a base tax credit of $5,000 per job, per year, for 10 years on the amount of Corporate Business Taxes owed. The State EDA could increase the amount to $8,000 per job if certain conditions are met. Under amendments approved by the Assembly, businesses would be capped in the amount of Grow New Jersey tax credits they could apply to their annual tax responsibility – either one-tenth of their capital investment or $4 million, whichever is less.
Senator Lesniak added that the EDA would have the authority to increase the amount of the program, beyond $200 million, if the agency determines that additional tax credits are reasonable, justifiable and appropriate. The EDA would be able to recapture the amount of the tax credit issued if a business does not remain at the site for at least 15 years. The business would forfeit their credits if it does not maintain an 80 percent job retention standard, employ less than 100 people at the location, or the business is sold or subleases its tenancy in whole or in part to another corporate entity.
“Not only would Grow New Jersey create jobs, but it would also encourage businesses to make an investment in areas in need of redevelopment, including abandoned corporate properties,” said Senator Lesniak. “This bill would allow New Jersey to expand its job market, put vacant, decaying corporate facilities back on the tax rolls, and encourage private investment in New Jersey at a time when we’re still struggling to pull ourselves out of the mire of recession.”
The Senate approved the bill by a vote of 37-0. The Assembly approved the bill by a vote of 60-2-4. The bill will now go to the Governor to be signed into law.