If you're creating new jobs, retaining existing ones, or developing or expanding a commercial or residential project, your business might be eligible for tax credits or tax rebates under the New Jersey Economic Opportunity Act of 2013. The Act consolidates and expands certain incentive programs for job creation and redevelopment.
Specifically, it expands the Grow New Jersey Assistance Program and the Economic Redevelopment Growth ("ERG") grant program, both administered by the New Jersey Economic Development Authority.
Grow New Jersey: To be eligible for tax credits, your project must be (1) located in a qualified incentive area; (2) a qualified business facility; (3) meet the capital investment requirement; and (4) create or retain a specified number of full-time jobs. Qualified incentive areas include mega-projects, Garden State Growth zones, distressed municipalities, priority areas, aviation districts and certain portions of the Meadowlands, Pinelands and Highlands. While retail facilities usually don't qualify, there are exceptions (for example, a "tourism destination project").
To qualify for the tax credits, companies must create or retain:
· 10 new or 25 retained full-time jobs for a technology start-up or manufacturing company
· 25 new or 35 retained full-time jobs for a business engaged in a targeted industry
· 35 new or 50 retained full-time jobs for any other business
Companies can earn tax credits in the following amounts:
· $5,000 for a qualified business facility located within a urban transit hub municipality or a Garden State Grow Zone, or for a mega-project
· $4,000 for a qualified business facility located within a distressed municipality
· $3,000 for a project in a priority area
· $500 for a project in other eligible areas
· Bonus credits may be awarded if a qualified business facility meets certain additional criteria
The Act provides for a maximum amount of credits per employee per year and a maximum amount of credits per business per year. The Act provides that each new full-time job is eligible to receive 100% tax credit and each retained full-time job to receive 50% tax credit. Tax credits may be sold or assigned with a tax liability.
ERG: ERG allows developers to be paid rebates in an amount up to 20%, and in some cases, 40%, of project costs from certain New Jersey State and local taxes that are generated from a project. The rebates are paid annually after project completion for up to a 20 year period. The amount of the rebate in any year is limited to 75% of the State and local taxes generated from the project. Only certain targeted areas in the State or certain types of projects, such as a "tourism destination project," are eligible.
The Act also allows, for the first time, tax credits to be used to fund a qualified residential project, defined as a project that is predominately residential and includes multi-family units for purchase or lease.
