P.L. 2011, c. 149, signed into law January 5, 2012, effective immediately, established the Grow New Jersey Assistance Program. The program is established as a program administered by the Economic Development Authority (EDA). The program allows the EDA to grant tax credits to businesses that meet the eligibility qualifications of the grant program as described in P.L. 2011, c. 149.
To be eligible:
- A business must make a minimum of a $20,000,000 capital investment in a qualified incentive area;
- A business must create or retain at least 100 fulltime employee positions which provide employee health benefits under a group health plan;
- The positions must be in an industry identified by the EDA as desirable for New Jersey; and
- The award of the credit must be a material factor in creating or retaining the minimum number of employees.
Point-of-final-purchase retail facilities are not eligible for the credit. Further details on the eligibility requirements are located in P.L. 2011, c. 149. The credit is $5,000 per year per qualified full-time position for a period of 10 years. An additional $3,000 per year per qualified full-time position for a period of 10 years may be awarded as prescribed by factors warranting such bonus reward as found in the Act. The tax credit available to each business shall not exceed the lesser of one tenth the capital investment or $4,000,000.
The tax credit is applied against the businessís Corporation Business Tax liability pursuant to N.J.S.A. 54:10A-5. The amount of the tax credit that exceeds the businessís tax liabilities for the tax period can be carried forward for a period of 20 years, provided the total value of all credits awarded by the EDA do not exceed the yearly limit of $200,000,000 or $1,500,000,000 in the course of ten years, as set forth in P.L. 2011, c. 149.
While partnerships are not allowed a credit directly, the credit is allowed based on each ownerís share of the total distributive income or gain of the partnership for its tax period ending with or within the owner's tax period, or based on that proportion that is allocated by an agreement among the owners of the partnership.
Businesses which receive the tax credit can also apply for a benefit transfer certificate covering tax periods over one or more years in lieu of using the credits. The transfer certificate can be sold to another business that has Corporation Business Tax liabilities for consideration of an amount which is a minimum of at least 75 percent (75%) of the value of the tax credit transferred. The amount of a tax credit transfer certificate used by a purchaser or assignee against a tax liability shall be subject to the same limitations and conditions that apply to the use of the credit by the business that originally received the credit.
Businesses must apply to the EDA for the tax credit prior to July 1, 2014.