Grow New Jersey: Program offers transferrable tax credits against corporate income and insurance premium taxes to companies that create and/or retain jobs. Tax credits are awarded on a per-job basis and can range from a base amount of $500 per job, per year to a base amount of $15,000 per job, per year for a period of up to 10 years (i.e., $5,000 to $50,000 over 10 years). In addition to the base amount, most businesses are eligible for a potential bonus awards based on a number of factors – e.g. industry sector, wages and capital investment, the number of jobs created or retained, project location (including urban locations and proximity to public transportation) and other variables.
The minimum number of jobs required to be eligible varies with industry and type of project. For example, a technology startup company or manufacturer must create at least 10 jobs, while a non-tech business in one of New Jersey’s other targeted industry sectors would need at least 25 jobs. All other businesses must create at least 35 new jobs to qualify for the program. To incentivize companies to locate in one of the state’s more economically distressed urban areas (called Garden State Growth Zones or GSGZs) and in South Jersey counties, the program reduces the minimum job creation requirements by one-fourth or 25%. There also are minimum capital investment thresholds which vary based on the type of project and are lower for renovations versus new construction projects. Certain minimal “green building” design standards also apply.
This NJ program and predecessors have been prolific, with the State having awarded more than $7 billion in tax credits in the past seven years.
Economic Redevelopment and Growth (ERG) Program: A developer that can demonstrate that its project requires a subsidy in order to close a “project financing gap” may apply for an incentive grant in an amount up to 75% of the annual incremental tax revenues generated by the development project over up to a 20-year period. If the project is located within a Garden State Growth Zone, 85% of the projected annual incremental revenues may be pledged toward the award. Commercial projects may receive an incentive grant reimbursement of up to 20-40% of total project cost, depending on where the project is located and whether or not it meets other economic development criteria, such as proximity to public transit. Residential projects that do not generate tax revenues can qualify for transferrable tax credits that can be sold and/or assigned to lenders for project financing. The tax credit can be up to 20-30% of total project cost and is given out over a 10-year term. This is a discretionary program.
Urban Enterprise Zone (UEZ) Sales Tax Exemption: Businesses that sign new leases or purchase property in one of the 27 communities in New Jersey with Urban Enterprise Zones may qualify for a state sales tax exemption on qualified purchases. The UEZ designation for Bridgeton, Camden, Newark, Plainfield, and Trenton expired January 1, 2017.
Note: This summary covers the primary incentives programs with the broadest applicability. The State also has other funding tools for more specialized needs, and many municipal governments also may make available tax abatement and other forms of TIF-like financing available for selected projects.
Last updated: June 2017