The New Jersey legislature passed two companion measures (A.4/S.3295) termed the New Jersey Economic Recovery Act. It is understood that Gov. Murphy is expected to sign the measures into law in the coming weeks. It is estimated that this bill will provide over $14 billion of incentives over the lifespan of the Act. The Act does provide for caps on the amount of benefits available to specific programs (e.g., the benefit for transformative development projects under the Aspire Program is capped at $2.5 billion over the duration of the incentive).
While not specific to the pandemic, the new legislation provides incentives for a variety of business activities, including:
- The “Emerge Program” provides benefits for increasing capital investment and employment in the state
- The “Aspire Program” will provide additional benefits for up to six (6) ‘transformative development projects’ that will substantially increase employment and investment in the state (g., luring a development similar to Amazon’s HQ2 to the state)
- The “Evergreen Program” which assists venture capital projects in the state
- The Main Street Recovery Program provides incentives for small businesses with less than 10 employees
- Rehabilitating and/or renovating commercial properties near transportation hubs, historic properties, and brownfield sites
- Creating clean energy
- Film and television production
- Grocery stores opening and/or expanding operations in designated “food desert” areas
The Act, which runs over 200 pages has numerous requirements (e.g., prevailing wage requirements for property renovation/rehabilitation projects) and also creates an Office of Inspector General to audit incentive awards and clawback incentives where the terms of an incentive package are not met by the claimant. Additional updates to the incentives provided by the state will be provided once the bill has been enacted and regulations/guidance issued by the Economic Development Authority and the Division of Taxation.
contact a member of Withum’s Tax Services Team.
Author: Jonathan Weinberg J.D., LL.M. | [email protected]
State and Local Tax Services