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New Jersey Enacts Economic Opportunity Act of 2014

New JerseyOn October 24, 2014, New Jersey Gov. Chris Christie signed the Economic Opportunity Act of 2014 (Act), which modifies several of New Jersey’s economic development incentive programs, most notably the Grow New Jersey program.  The changes made by the Act are effective immediately.

Among the changes made to the Grow New Jersey program are the following:

  •  The Atlantic City Tourism District has been designated as a Garden State Growth Zone, thereby making projects within the tourism district eligible for the Grow New Jersey program.
  •  The Act modifies the definition of “mega project” to include projects located in an area designated in need of redevelopment that have a capital investment of at least $20 million and that create or retain at least 150 full-time jobs. The area designated in need of redevelopment must be in Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Ocean or Salem counties. Mega project status qualifies the project for increases in the maximum amounts of credit awards allowable.
  •  Minimum capital investment requirements have been reduced for warehousing, logistics and research and development premises. For new construction of such premises, the minimum capital investment is reduced from $120 to $60 per square foot. For rehabilitation and improvement of such facilities, the minimum capital investment is reduced from $40 to $20 per square foot.
  •  Site acquisition costs incurred within 24 months of a Grow New Jersey application are no longer treated as “capital investment,” unless the project is located in a Garden State Growth Zone. Also, development costs within a Garden State Growth Zone now qualify as a capital investment.
  • The Act adds bonus credit amounts of $1,000 per full-time job created or retained for projects investing in vacant office or laboratory space. The vacant space must consist of at least 1,000,000 square feet of space and must have been vacant for at least one year.
  •  The Act lowers threshold requirements for project to be treated as qualified incubator facility. A qualified incubator facility now must have 50,000 square feet (down from 100,000), and at least 50 percent (down from 75 percent) of its gross leasable area must be restricted to technology start-up companies. A qualified incubator facility qualifies for a $500 bonus credit per full-time job created or retained.
  •  Previously, the allowable amount of credit for a retained full-time job was 50 percent of the prescribed base amount of credit, which varied based on which category a project used to qualify for Grow New Jersey credits. The Act generally amends the limitation to the lesser of (a) 50 percent of the base amount plus any applicable bonus credits, or (b) 10 percent of the project’s capital investment divided by the number of new and retained full-time jobs, with some limited exceptions.
  •  Projects may now apply to director of the Division of Taxation to sell or transfer tax credits under the Grow New Jersey program, with a minimum threshold of $25,000 established.
  •  Nonprofit organizations in Garden State Growth Zones and qualified incubator facilities located in any designated incentive area may now file consolidated Grow New Jersey applications on behalf of projects comprised of several individual businesses that would not otherwise qualify for tax credits on their own.

Other New Jersey incentive programs are modified by the Act as well:

  •  With respect to the Economic Redevelopment and Growth Grant (?) program, the Act extends the deadline for filing applications for residential redevelopment projects by one year (to July 1, 2016). The deadline for residential redevelopment projects to submit a temporary certificate of occupancy is extended to July 28, 2018.
  •  The Act lowers the minimum Tax Credit Certificate amount for the sale or transfer of Urban Transit Hub credits from $100,000 to $25,000.

The Act establishes a new tax credit of up to $5,000,000 for re-developers who donate public infrastructure to government entities as part of a qualified project. The credit is equal to the developer’s cost of providing the public infrastructure. The credit is not available to any applicant who (1) has received tax credits under the Grow New Jersey Assistance Program, (2) has received grants under the Economic Redevelopment and Growth Grant program, (3) is a Garden State Growth Zone Development Entity, or (4) is partnered with the New Jersey Sports and Exposition Authority. The total amount of credit to be awarded by the New Jersey Economic Development Authority is capped at $25,000,000 over five years.

The information provided in this blog post is for informational purposes only and not for the purpose of providing accounting, legal, or tax advice. The information and services ADP provides should not be deemed a substitute for the advice of any such professional.  Such information is by nature subject to revision and may not be the most current information available.


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One comment on “New Jersey Enacts Economic Opportunity Act of 2014”

  1. ken machemehl says:

    enjoy

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