§ 34:1B-129 — Employment incentive grant criteria; tax credit transfer certificate; elect to waive requirement, minimum employee time, criteria.

New Jersey § 34:1B-129

• Jurisdiction: New Jersey
• Title 34: LABOR AND WORKMEN'S COMPENSATION

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6. a. The amount of the employment incentive awarded as a grant by the authority shall either be awarded in cash or as a tax credit. In each case, the amount of the grant shall be not less than 10 percent and not more than 50 percent of the withholdings of the business, or not less than 10 percent and not more than 30 percent of the estimated tax of the partners of an eligible partnership whether paid directly by the partner or by the eligible partnership on behalf of the partner's account, or any combination thereof, and shall be subject to the provisions of sections 10 and 11 of P.L.1996, c.26 (C.34:1B-133 and C.34:1B-134). In no case shall the aggregate amount of the employment incentive grant awarded pursuant to a business employment incentive agreement entered into on or after July 1, 2003 exceed an average of $50,000 for all new employees over the term of the grant. The employment incentive shall be based on criteria developed by the authority after considering the following: (1) The number of eligible positions to be created; (2) The expected duration of those positions; (3) The type of contribution the business can make to the long-term growth of the State's economy; (4) The amount of other financial assistance the business will receive from the State for the project; (5) The total dollar investment the business is making in the project; (6) Whether the business is a designated industry; (7) Impact of the business on State tax revenues; and (8) Such other related factors determined by the authority. b. A business may be eligible to be awarded a grant, either in cash or in tax credits, of up to 80 percent of the withholdings of the business or up to 50 percent of the estimated tax of the partners of an eligible partnership if the grant promotes smart growth and the goals, strategies, and policies of the State Development and Redevelopment Plan, established pursuant to section 5 of P.L.1985, c.398 (C.52:18A-200), as determined by and based upon criteria promulgated by the authority following consultation with the Office of State Planning in the Department of State. c. The term of the grant shall not exceed 10 years. d. At the discretion of the authority, the grant may apply to new employees or partners in eligible positions created during the base years, and during the remainder of the term of the grant. e. Within 180 days of the date of enactment of P.L.2015, c.194 (C.34:1B-137.1 et al.), a business that was approved for a grant prior to the enactment of P.L.2015, c.194 (C.34:1B-137.1 et al.), may direct the authority to convert the grant to a tax credit against the tax liability otherwise due 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 54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5. The direction to convert the grant to a tax credit shall be irrevocable. An approved tax credit shall be issued in the manner and for the amounts as follows and may only be applied in the tax period for which they are issued and shall not be carried forward: (1) For grants accrued but not paid during calendar years 2008 through 2013, the tax credit shall be equal to an approved amount and shall be issued in five installments over a five-year period beginning in the 2017 tax accounting or privilege period of the business or tax credit transferee in the following percentages: in year one, five percent of the accrued amount; in year two, 20 percent of the accrued amount; in year three, 25 percent of the accrued amount; in year four, 25 percent of the accrued amount; in year five, 25 percent of the accrued amount. To the extent any amount in this paragraph has not been approved by the authority by the commencement of State fiscal year 2017, the aggregate tax credit that would have been issued in State fiscal year 2017 shall be issued in the year the amount is approved and the five-year period shall commence in that fiscal year; (2) For a grant accrued but not paid during calendar year 2014, the tax credit shall be equal to any approved amount and shall be issued in four equal installments over a four-year period beginning in the 2019 tax accounting or privilege period of the business or tax credit transferee; (3) For a grant accrued but not paid during calendar year 2015, the tax credit shall be equal to any approved amount and shall be issued in four equal installments over a four-year period beginning in the 2019 tax accounting or privilege period of the business or tax credit transferee; (4) For a grant accrued but not paid during calendar year 2016, the tax credit shall be equal to any approved amount and shall be issued in three equal installments over a three-year period beginning in the 2020 tax accounting or privilege period of the business or tax credit transferee; (5) For a grant accrued but not paid during calendar year 2017, the tax credit shall be equal to any approved amount and shall be issued in three equal installments over a three-year period beginning in the 2020 tax accounting or privilege period of the business or tax credit transferee; (6) For a grant accrued but not paid during calendar year 2018, the tax credit shall be equal to any approved amount and shall be issued in two equal installments over a two-year period beginning in the 2022 tax accounting or privilege period of the business or tax credit transferee; (7) For a grant accrued but not paid during calendar year 2019, the tax credit shall be equal to any approved amount and shall be issued in two equal installments over a two-year period beginning in the 2022 tax accounting or privilege period of the business or tax credit transferee; (8) For a grant accrued but not paid during calendar year 2020, the tax credit shall be equal to any approved amount and shall be issued in two equal installments over a two-year period beginning in the 2023 tax accounting or privilege period of the business or tax credit transferee; (9) For a grant accrued but not paid during calendar year 2021, the tax credit shall be equal to any approved amount and shall be issued in two equal installments over a two-year period beginning in the 2023 tax accounting or privilege period of the business or tax credit transferee; (10) For a grant accrued but not paid during calendar year 2022, the tax credit shall be equal to any approved amount and shall be paid in two equal installments over a two-year period beginning in the 2023 tax accounting or privilege period of the business or tax credit transferee; (11) For a grant accrued but not paid during calendar year 2023, the tax credit shall be equal to any approved amount and shall be issued in two equal installments over a two-year period beginning in the 2023 tax accounting or privilege period of the business or tax credit transferee; (12) For a grant accrued but not paid during calendar year 2024, the tax credit shall be equal to any approved amount and shall be issued in the 2025 tax accounting or privilege period of the business or tax credit transferee; and (13) For a grant accrued but not paid during calendar year 2025, the tax credit shall be equal to any approved amount and shall be issued in the 2025 tax accounting or privilege period of the business or tax credit transferee. f. The amount of the credit allowed pursuant to this section shall be applied against the tax otherwise due under 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, prior to all other credits and payments. If the credit exceeds the amount of tax liability otherwise due from a business that pays taxes under 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, that amount of excess shall be an overpayment for the purposes of R.S.54:49-15, provided, however, that section 7 of P.L.1992, c.175 (C.54:49-15.1) shall not apply. g. (1) A business that does not pay taxes under 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 54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5 may apply to the executive director of the authority for a tax credit transfer certificate, covering one or more years. (2) A business that has received a tax credit pursuant to subsection e. of this section, which credit exceeds the amount of the tax liability otherwise due, may apply to the executive director of the authority for a tax credit transfer certificate, covering one or more years. (3) Upon the executive director's approval of an application for a tax credit transfer certificate, the division shall review and issue the tax credit transfer certificate. The tax credit transfer certificate, upon receipt thereof by the business, may be sold or assigned, in full or in part, in an amount not less than $100,000, or the amount of the refundable tax credit issued if less than $100,000, of tax credits to any other person that may have a tax liability 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 54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5. The tax credit transfer certificate provided to the business shall include a statement waiving the business's right to claim that amount of the credit against the taxes that the business has elected to sell or assign. The sale or assignment of any amount of a tax credit transfer certificate allowed under this section shall not be exchanged for consideration received by the business of less than 75 percent of the transferred credit amount before considering any further discounting to present value which shall be permitted. Any amount of a tax credit transfer certificate used by a purchaser or assignee against a tax liability shall be subject to the same privileges, limitations, and conditions that apply to the use of the credit by the business that originally applied for and was allowed the tax credit, including treating the amount of excess as an overpayment under subsection f. of this section. The tax credit transferee may not transfer its tax credit to any other party. h. Following the termination of the public health emergency declared by the Governor pursuant to Executive Order No. 103 of 2020, as extended, a business that has entered into an incentive agreement may elect, before March 31, 2024, to waive, for the period beginning on July 1, 2022 and ending on March 31, 2024, the requirement that a full-time employee who is employed by the business shall spend at least 60 percent of the employee's time at the qualified business facility; provided, however, that a business that makes such an election shall satisfy the following criteria: (1) any full-time employee employed by the business shall spend at least 10 percent of the employee's time at the qualified business facility for the 2023 tax period and, if elected by the business, the 2024 tax period through March 31, 2024; and (2) following the receipt by the business of its tax credit certificate or tax credit transfer certificate for the 2022 tax period, the business shall make a payment of an amount equal to five percent of the amount of tax credit the business receives for the 2022 tax period through March 31, 2024, which payment shall be made to the authority, and which payment the authority shall hold and make available for the provision of loans, guarantees, equity investments, and grants, or other forms of financing to support small business and downtown or commercial corridor activation activities within the municipality in which the qualified business facility is located, as may be designated by the chief executive officer of the authority. Such funds shall be deployed by the authority within 12 months of the authority's receipt of the funds, and the authority shall issue a report each fiscal year to the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), detailing how the funds were distributed. i. Notwithstanding the provisions of section 2 of P.L.1996, c.26 (C.34:1B-125) or any other law or regulation to the contrary, beginning on April 1, 2024, and for all subsequent tax periods, a business located outside an enhanced area or government-restricted municipality, as those terms are defined in section 69 of P.L.2020, c.156 (C.34:1B-337) that has entered into an incentive agreement with the authority may elect to waive the requirement that a full-time employee who is employed by the business shall spend at least 60 percent of the employee's time at the qualified business facility, provided, however, that a business that makes this election shall satisfy the following criteria: (1) for a qualified business facility located outside an enhanced area or government-restricted municipality, as those terms are defined in section 69 of P.L.2020, c.156 (C.34:1B-337), any full-time employee employed by the business shall spend at least 40 percent of the employee's time at the qualified business facility during the tax period; (2) the business shall extend by two years the time it is required to maintain the project at a location in New Jersey beyond the time set forth in the incentive agreement; and (3) at the time the business submits its tax credit certificate certification for the tax period, the business shall make a non-refundable payment of an amount equal to 10 percent of the amount of the maximum annual tax credit that the business is eligible to receive for the tax period, which payment shall be made to the authority and which payment the authority shall hold and make available for the provision of loans, guarantees, equity investments, and grants or other forms of financing to support small business and downtown or commercial corridor activation activities within enhanced areas or government-restricted municipalities, as those terms are defined in section 69 of P.L.2020, c.156 (C.34:1B-337), as may be designated by the chief executive officer of the authority. Such funds shall be deployed by the authority within 12 months of the authority's receipt of the funds, and the authority shall issue a report each fiscal year to the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), detailing how the funds were distributed. j. Notwithstanding the provisions of any law to the contrary, the credit amount may first be taken by the tax certificate holder for the tax period for which it was issued, for the tax period in which it was issued, or in any tax period during the time the business is required to maintain the project at a location in New Jersey, as set forth in the incentive agreement. The tax certificate holder may transfer the tax credit amount on or after the date of issuance for use by the transferee in the tax period for which it was issued, for the tax period in which it was issued, or in any of the next three successive tax periods. The tax certificate holder or transferee may first use the credit against tax liabilities in the tax period in which it was issued or in a succeeding tax period, as authorized in this subsection, without the need for amending the tax return for the tax period for which the credit was issued, subject to the provisions of this section. L.1996, c.26, s.6; amended 1998, c.33, s.2; 2003, c.166, s.4; 2015, c.194, s.2; 2016, c.9; 2017, c.12, s.1; 2022, c.134, s.2; 2023, c.261, s.2; 2024, c.40, s.2.