Category: New Jersey

New Jersey Credits and Incentives

As we’ve mentioned before, our Georgia clients frequently ask us to investigate potential credits and incentives in other states where they have operations, potential acquisitions or strong relationships with customers or vendors. In addition, private equity groups ask us about potential $$ for their portfolio companies.

We were recently asked about credits and incentives in New Jersey. I was able to speak with some New Jersey economic development professionals and learned some of their details (New Jersey Economic Development Authority click here).

A big difference between New Jersey and most other states is that they have some of the highest corporate and personal tax burdens.  New Jersey ranks 49th in the The Tax Foundation’s 2014 Business Tax Climate Index (clickhere).

But if you are the right kind of company, and in the right place, New Jersey has a wide selection of incentives, credits, and programs to assist businesses and communities for increasing and retaining New Jersey jobs and increasing business investments.  Grow New Jersey Assistance Program (GROW)is a new initiative, consolidating and expanding several expiring programs, that provides 10-year credits for firms considering moving to or leaving the state (click here).  Another program allows certain biotech and tech companies to sell unused NOLs and R&D credits.  There are LOTS of hoops to jump through, including business type, size, wages, location, and other factors.

Another big consideration — a long application and approval process is required for all of New Jersey’s primary incentives.  And, New Jersey’s credits and incentives are far more complicated than most other states. 
Compared to Georgia, New Jersey has:

  • Higher taxes:  Higher corporate income tax.  Far higher personal state income taxes.  Higher sales taxes and far higher property taxes.
  • A narrower range of industries eligible for incentives if adding jobs, a narrower range for capital investments, and a far narrower range for training incentives.
  • NO opportunities for incentives unless pre-approved by state and/or local officials.
  • Location, location, location — if that’s what is important to the business

To summarize, New Jersey is not very competitive for new and expanding businesses, unless those businesses really need New Jersey’s prime East Coast location between the New York and Philadelphia business centers. Most of New Jersey’s incentives seem to go toward paying off large companies not to leave the state!
Do any of your clients have New Jersey connections?  Make sure you review their potential qualifying activities early to maximize their $$ benefits!!