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New Jersey Looks to Revamp Business Tax Incentive Programs

Posted by admin on April 03, 2013

There aren't many shining examples of bipartisanship in American politics today. However, New Jersey politicians from both sides of the aisle have banded together to introduce and support legislation that would overhaul the state's business tax incentive structure to encourage firms to open up shop in The Garden State.

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Bicameral legislation solidifies tax breaks
In an effort to retool the state's strategy of incentivizing businesses to relocate or expand to New Jersey by offering tax breaks, two pieces of legislation - one for both house of the New Jersey Legislature - were introduced, calling for reorganization of state programs and expansion of eligible businesses.

As proposed in the state's upper house, legislation brought by Sen. Raymond Lesniak would bolster New Jersey's tax break program by consolidating departments and strengthening others. The New Jersey Economic Opportunity Act of 2013 would expand the Grow New Jersey Assistance Program (GNJAP) and the Economic Redevelopment and Growth Grant Program (ERGGP), among others. Additionally, it would phase out the Business Retention and Relocation Assistance Grant Program, the Business Employment Incentive Program and the Urban Transit Hub Tax Credit Program, which are all run by the Economic Development Authority.

The legislation would reinforce the GNJAP by replacing a minimum threshold for the number of full-time workers a business must employ to qualify for tax breaks. Instead it would replace that mandate with a more scalable measure; the proposal would also eliminate an application deadline in favor of a three-year capital investment period.

Likewise, the proposed bill would alter the ERGGP by establishing a formal definition of a "technology startup company" to enable more business to apply for tax breaks. The program would also be remodeled to become the state's premier redeveloper incentive project to rebuild tourist destinations destroyed by Hurricane Sandy.

Legislation introduced in the state's House by Rep. Albert Coutinho, would mirror the same calls for restructuring and consolidation advocated by the Senate bill.

Christie gets behind proposals
Even though Lesniak and Coutinho are Democrats, New Jersey Gov. Chris Christie, a Republican, was swift to offer his support for the bicameral pieces of legislation.

Speaking at a public policy forum, Christie said he'd like to see the bills put on the fast track in order to "arm all of you [businesses] with the tools from the incentive perspective, so we can continue the great momentum that we have here in the state."

Firms in states that offer business tax incentives but are unaware of such measures should work with an HR service provider that can consistently keep them aware of any evolving legislation or initiatives that offer companies more tax-based incentives.

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Topics: New Jersey

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