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Grow New Jersey Assistance Tax Credit

New Jersey offers businesses that create and retain jobs in the state tax credits that range from $500 to $5,000 per job, per year. In addition, bonus credits are available ranging from $250 to $3,000 per job, per year. This credit is available to businesses that make a qualified capital investment at a qualified business facility in a qualified incentive area as defined in the Grow New Jersey Assistance Act.

The credit can be applied to 100% of the tax liability and can be passed through to partners of a partnership. It can be carried forward up to 20 years or sold.

Eligibility

In order to qualify, a project must meet the following requirements:

  1. The project must locate into a Qualified Incentive Area.
  2. It will meet or exceed minimum employment and capital investment requirements. Those requirements are outlined below:

  3. Minimum Full-Time Employment Requirements
    Industry New/Retained Full-Time Jobs
    Tech start-ups and manufacturing businesses 10/25
    Other targeted Industries 25/35
    All other businesses/industries 35/50
    Minimum employment numbers are reduced to 3/4 of the number listed above in Garden State Growth Zones (“GSGZ”) and in eight South Jersey counties: Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Ocean and Salem.


    Minimum Capital Investment Requirements
    Project Type ($/Square Foot of Gross Leasable Area)
    Industrial, Warehousing, Logistics and R&D - Rehabilitation Projects $20
    Industrial, Warehousing, Logistics and R&D - New Construction Projects $60
    Other – Rehabilitation Projects $40
    Other – New Construction Projects $120
    Minimum capital investment amounts are reduced to 2/3 of the amount listed above in GSGZs and in eight South Jersey counties: Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Ocean and Salem.

  4. Demonstrate that the award of the tax credit is a “material factor” in the business’s decision to create or retain at least the minimum number of full-time jobs.
  5. The business must demonstrate that the capital investment and creation of the jobs will yield a net positive benefit of at least 110% of the requested tax credit amount.
  6. The project must meet Green Building Requirements.
  7. Within 12 months from the date of approval by the NJ Economic Development Authority, the business must submit progress information indicating that the business has site plan approval, committed financing for and site control of the qualified business facility.
  8. All construction contracts related to the project must use “prevailing wage” labor rates and affirmative action requirements.
  9. The business must maintain the project and related employment at the project site for 1.5 times the period for which the business receives the credit beginning with acceptance by the Authority of the project completion certifications.
  10. The business must maintain a minimum of 80% of its full-time New Jersey workforce from the last ax period prior to the grant approval and 80% of the number of new and retained full-time jobs at the qualified business facility specified in the agreement.

Tax Credit Amounts Available
Qualified eligible businesses will be awarded tax credits for up to 10 years for each new or retained full-time job located at the qualified business facility.

Fees
Depending on the amount of the credit and number of jobs, the application fee ranges from $1,000 to $5,000.

Businesses considering expanding in New Jersey should consider a project in one of the qualified locations to take advantage of the tax credits available. If you have questions about the New Jersey Assistance Tax Credit, please contact your HBK Advisor.

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About the Author(s)
Sue is a Senior Manager in the Pittsburgh, Pennsylvania office of HBK. She began her career in 1990 spending 14 years in public accounting followed by 14 years in government. Sue has extensive experience in state taxation and pass through entities. While working at the PA Department of Revenue, she was the Director of the Pass-Through Business Office for 11 years prior to being promoted to Deputy Secretary for Compliance and Collections. She is a member of the HBK’s Tax Advisory Group.
Hill, Barth & King LLC has prepared this material for informational purposes only. Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.

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