Your employees still aren’t in the office on a regular basis? That won’t necessarily hurt your ability to receive your tax incentive from the state.
Later Thursday afternoon, Gov. Phil Murphy is expected to sign a bill that will extend accommodations related to the COVID-19 public health emergency for businesses participating in certain state economic development programs.
The bill, A4929, provides certain accommodations to businesses participating in the Business Employment Incentive Program, the Business Retention and Relocation Assistance Grant Program, the Grow New Jersey Assistance Program and the Urban Transit Hub Program.
Michael Egenton, executive vice president, government relations, at the New Jersey Chamber of Commerce, fought hard for the bill, which he said will have great impact in the business community.
“Where and how employees work has changed drastically since the pandemic,” he said. “We thank the governor and the Legislature for acknowledging that by passing and signing legislation that will provide employers with flexibility in regards to complying with tax incentive requirements.
“The bill allows companies already taking advantage of certain tax incentives offered by the state to remain eligible. This will encourage those employers to continue to invest in New Jersey.”
The bill, which was sponsored by Assemblywoman Eliana Pintor Marin, (D-Newark), Assemblymen Lou Greenwald (D-Voorhees) and Reginald Atkins (D-Roselle), and Sens. Teresa Ruiz (D-Newark) and Nellie Pou (D-Paterson), will do the following:
This bill provides an additional waiver to eligible businesses for the period beginning July 1 and ending Dec. 31, 2023.
Specifically, the bill allows businesses to waive the requirement that a full-time employee who is employed by the business is to spend at least 60% of the employee’s time at the qualified business facility.
A business that makes such an election is required to satisfy the following criteria:
- Any full-time employee employed by the business is required to spend at least 10% of the employee’s time at the qualified business facility through the 2023 tax period; and
- Following the receipt by the business of its tax credit certificate or tax credit transfer certificate for the 2022 tax period, the business is required to make a payment of an amount equal to 5% of the amount of tax credit the business receives for the 2022 tax period, which payment is to be made to a local economic development entity designated by the chief executive of the municipality in which the qualified business facility is located.
During the COVID-19 public health emergency, the New Jersey Economic Development Authority implemented certain accommodations for businesses that had previously been approved awards under these programs.
As part of these accommodations, the EDA waived the requirement that a full-time employee employed by a business participating in any of the programs is to spend at least 80% of the employee’s time at the qualified business facility to be eligible for an award under the program. The New Jersey Economic Recovery Act of 2020 lowered the requirement for spending time at the qualified business facility to 60% of the employee’s time.
During the COVID-19 public health emergency, the EDA also allowed businesses participating in the Grow New Jersey Assistance Program to terminate their program agreements any time before Dec. 31 without the EDA recapturing previously distributed tax credits. The bill extends this accommodation for one calendar year, allowing business to terminate their program agreements any time before Dec. 31, 2023, commencing with the 2020 tax period or any subsequent tax period ending on or before Dec. 31, 2023.