Monday, January 9, 2012

New Jersey—Jobs Tax Credit

The New Jersey Legislature has passed a bill that would provide a credit against the corporation business tax. Partnerships, S corporations, and limited liability companies would be able to pass through the credit to their members. The business must utilize a facility of a minimum $20 million value, employ at least 100 full-time persons (retained or created), provide health care benefits, and be a desirable industry as identified by the New Jersey Economic Development Authority (Authority). The business would have to demonstrate that 1) it would yield a net positive benefit to the state and 2) the existence of a credit was instrumental in the decision to create or retain that many jobs. (What? No room for a 'hand over your first born' clause?)

The credit is $5,000 per year for a period of 10 years for each new or retained full-time job. The Authority would be authorized to grant a bonus award of up to an additional $3,000 per job, depending on the type of industry, the location of the business, and whether the annual salaries for the jobs exceed the average full-time salary in the state. The amount of tax credits available to be applied by a business annually would be limited. Apply by July 1, 2014. A carryover of unused credits would be available for up to 20 tax periods. Credits would be transferable. Credits would be forfeited if conditions of certification were not met.

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