State tax credits are dollar-for-dollar reductions in State tax liabilities, creating tax benefits for the owner of the tax credit. They are not to be confused with the federal Low Income Housing Tax Credit (LIHTC).

New Jersey businesses with liabilities pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5, colloquially referred to as the Corporate Business Tax or Insurance Premium Taxes, are eligible to participate in the auction to purchase New Jersey State tax credits. Credits may only be applied to the aforementioned State tax liability.

All bidders must possess and submit a valid Tax Clearance Certificate from the New Jersey Division of Taxation for the bidder organization and all related entities.

To obtain a Tax Clearance Certificate, please email BusinessAssistanceTC.Taxation@treas.nj.gov or call (609) 322-6835.

The minimum bid that will be considered is $250,000 in tax credit authorization. The maximum bid is $100 million in tax credit authorization. All bids must be above or equal to $0.80 per tax credit. For example, a bid submitted seeking $1,000,000 in tax credits at face value for $0.95 per tax credit creates a total bid of $950,000.

Bids are submitted through an online auction portal, which will be posted when the auction is open. All bids must be completed through the online auction portal. NJHMFA will not review bids submitted via mail or email. The refundable ten percent total bid deposit and non-refundable $500 bid fee are to be wired to NJHMFA before the close of the auction. Wiring information is provided in the bid form.

All bids are final once the auction closes.

Eligible bids are reviewed after the auction closes and ranked based on the bid price per credit, sorted highest to lowest bid price per credit. For bids with equal bid price per credit, the total bid amount, sorted from highest to lowest total bid amount, will be used to determine priority. In the event that bids have the same bid price per credit and total bid amount, submission date and time, sorted by earliest to latest submission date and time, decides priority. Once a ranking of eligible bids has been created, NJHMFA will send to the New Jersey Division of Taxation the approved ranking. Taxation will complete a review to determine eligibility.

Successful and unsuccessful bidders will be contacted by email. Successful bidders will be asked to sign and submit a tax credit purchase agreement and provide full tax credit purchase payment. Unsuccessful bidders will be wired the deposit previously submitted. The $500 bid fee is nonrefundable for all bidders.

NJHMFA and the New Jersey Division of Taxation will evaluate all bids promptly after the close of the auction period. Timeline for review will vary depending on the number of bids received and bidders’ individual circumstances.

NJHMFA will release the tax credit certificate to a successful bidder upon receipt of a fully executed tax credit purchase agreement and receipt by NJHMFA of the full bid amount.

Successful bidders can utilize State tax credits immediately in the tax year the credits are purchased or carry forward unused State tax credits for up to seven years after purchase.

The auction to fund the affordable and workforce housing programs and the programs themselves are two separate processes. Unlike LIHTC, there is no connection between the purchase of tax credits and the end projects. 

If a tax credit awardee seeks to transfer the purchased tax credit certificate to another entity, the awardee must complete a tax credit transfer form prescribed by the New Jersey Division of Taxation and submit it to Taxation. The form will be reviewed by both Taxation and NJHMFA. Tax credits may not be transferred for less than 80 percent of the transferred credit amount. Ten percent of the consideration received by the transferor of the tax credits must be remitted to Taxation. If approved, the awardee and buyer of the tax credit certificate will be notified and the information will be posted on the NJHMFA website, as required by P.L.2025, c.111.