Grow NJ Assistance Program – Incentives for Job Creation and Retention
As of the latest posted update on November 24, 2017, the New Jersey Economic Development Authority (NJEDA) website (www.njeda.com) boasted that 242 active projects were awarded amounts in excess of $4.6 billion, with over 30,000 newly created jobs and 34,000 at risk jobs retained since the enactment of the New Jersey Economic Opportunity Act of 2013. This credit is available to large business and development companies, manufacturing businesses, and emerging technology and life science companies.
Typical of most all state incentive programs, this credit has many eligibility criteria and annual compliance reporting requirements, and the state reserves the right to modify or deny approvals if requirements are not met timely and fulfilled in their entirety. However, requirements are manageable and, in fact, the statistics reflected above indicate that many opportunities are actively and successfully being pursued within the state. With a current submission deadline of June 30, 2019, qualified eligible developers and businesses can receive the tax credits per job per year for a period of up to ten years for each new or retained full-time job to be located in a qualified business facility in New Jersey.
Enhancing the allure of the Grow NJ incentive credit is the ability of the eligible award recipient to sell the credits to other profitable businesses within the state, turning tax credits into liquid cash flow. This is especially enticing for developers and businesses where generating cash flows upfront outweigh the benefits of generating tax credits only to be used to offset possible future taxable income. The most common businesses taking advantage of the transferability options include start-up companies, other businesses with pre-existing losses, or businesses with minimal income levels. By providing this flexibility, the State of New Jersey creates marketability for these credits and promotes a more effective way for eligible recipients of the Grow NJ awards to capitalize on the program.
The Grow NJ program entails a comprehensive application and requires pre-approval enforced by the NJEDA before commencement of any project. To be eligible, certain guidelines must be met by all applicants, as well as high scrutiny of the applications by the NJEDA. Additionally, the Chief Financial Officer is required to submit a certification along with a cost-benefit analysis as part of the application and demonstrate that an out-of-state option yields a less expensive and more beneficial option highlighting the fact that the Grow NJ program is a necessity to make staying in New Jersey a viable option for the developer or business owner.
Despite the rigorous reporting, mandatory green building standards, affirmative action and prevailing wage requirements of this program, developers and businesses have created more than 17,000 construction jobs and built new and improved space exceeding 29 million square feet since inception under this specific program. Staying current with the Grow NJ program or any other NJEDA financing and incentive programs is essential to enhancing a company’s effectiveness of earnings and making it more palatable to staying put in the beautiful Garden State.
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Rebecca Machinga, CPA, CGMA, Practice Leader of the Real Estate Services Group 609-520-1188 [email protected]
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