Available from the NJ Division of Taxation, the Manufacturing Equipment and Employment Investment Tax Credit provides a credit against corporation business tax liability for investments in certain manufacturing equipment and for certain increased employment. The manufacturing equipment portion of the credit is limited to 2 percent (4 percent for companies with 50 employees or less) of the net cost of qualified equipment up to a maximum allowed credit of $1 million. The employment investment portion of the credit is computed for each of the two succeeding years following the year a credit is allowed for the equipment investment. The tax credit in these years is limited to 3 percent of the net cost of qualified equipment, not to exceed $1,000 per job created directly related to the equipment.
Available from the NJ Division of Taxation, the R&D Tax Credit provides a credit for increased research activities based on qualified expenditures. This credit is calculated in the same manner as the federal tax credit for increasing research activities. It provides a credit of 10 percent of excess qualified research expenditures over a base amount, plus 10 percent of basic research payments. For periods beginning on or after January 1, 2012, the amount of the credits applied cannot reduce the tax liability to an amount less than the statutory minimum tax.
Items to Note
Available through the NJ Division of Taxation, a one-time credit of $1,500 is allowed for each new full-time, permanent employee who resides in any municipality which contains a zone, and immediately prior to employment by the qualified business was unemployed for at least 90 days or dependent upon public assistance as the primary source of income. A one-time credit of $500 is allowed for new full-time permanent employees who do not meet the qualification for the $1,500 tax credit, but are residents of any municipality in which a designated enterprise zone is located, and were not employed at a location within the qualifying municipality immediately prior to employment by the qualified business. The credit is available only for new full-time permanent employees who have been employed by the qualified business for at least six continuous months during the year for which the credit is claimed. For a new employee to be considered a full-time permanent employee, the total number of full-time permanent employees, including the new employee, employed by the qualified business during the calendar year must exceed the greatest number of full-time permanent employees employed in the zone by the qualified business during any prior calendar year since the zone was designated.
Urban Enterprise Zone Program, Department of Community Affairs 101 South Broad Street, PO Box 822, Trenton, NJ 08625 http://www.nj.gov/dca/affiliates/uez
Questions? Contact the UEZ Help Desk at (877) 913-6837
In lieu of / Alternate Urban Enterprise Zone Tax Credit
Businesses that were established at least one year prior to Zone designation or expansion with fewer than 50 employees that are unable to meet the increased employment requirement may (with UEZ approval) make annual investments in the zone until their employment requirement is met. In-Lieu applications may be obtained by contacting the help desk.
Investments could be improvements to the exterior appearance or customer facilities of the business.
Improvements to comply with existing ordinances are not eligible.
Financial or in-kind contributions to the zone municipality for improvements that increase the safety or attractiveness of the zone may be proposed.
The EDA administers two programs (Technology Business Tax Certificate Transfer Program and the BRRAG Tax Credit Certificate Transfer Program) that allow companies to sell stranded corporate business tax credits. Profitable companies with New Jersey Corporate Business Tax liability may purchase these stranded tax credits for a discount. If your company is interested in purchasing these credits if and when they become available for sale, please contact a Business Incentive Officer.