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Corporation Business Tax Credits and Incentives

HMO Assistance Fund Tax Credit   Effluent Equipment Tax Credit
Grow New Jersey Assistance Tax Credit   Economic Recovery Tax Credit
New Jobs Investment Tax Credit   AMA Tax Credit
Urban Enterprise Credits   Business Retention and Relocation Assistance Act
Redevelopment Authority Project Tax Credit   Sheltered Workshop Tax Credit
Recycling Equipment Tax Credit   Film Production and Digital Media Tax Credit
Manufacturing Equipment and Employment Investment Tax Credit   Offshore Wind Economic Development
Research and Development Tax Credit   Urban Transit Hub
Small New Jersey Based High Technology Business Investment Tax Credit   Environmental Opportunity Zones
Neighborhood Revitalization State Tax Credit   Other Business Incentives

  1. HMO Assistance Fund Tax Credit - Back to Top
    P.L. 2000, c.12, adopted April 6, 2000.  N.J.S.A. 17B:32B-12, N.J.A.C. 18:7-3.26. To claim this credit, the taxpayer must complete Form 310 and attach it to the tax return. 

    The HMO Assistance Fund Tax Credit is available to health maintenance organizations that paid assessments to the New Jersey Health Maintenance Organization Assistance Association.  Holders and former holders of a certificate of authority to operate a health maintenance organization are allowed a CBT credit for certain payments they are required to make.

    The total available credit is equal to 50% of the paid assessments for which a certificate of contribution was issued by the association. A member organization may offset against its corporation business tax liability an amount of not more than 10% of any assessment for each of the five privilege periods beginning on or after the third calendar year commencing after the assessment was paid, except that no member organization may offset more than 20% of its corporation business tax liability in any one year.

    There is no carryover provision for this tax credit, however, taxpayers that cease doing business in New Jersey before the end of the five year period may claim any credit amounts not yet applied against its tax liability on its final return.


  2. Grow New Jersey Assistance Tax Credit - Back to Top
    P.L. 2011, c. 149, effective January 5, 2012. To claim this credit, the taxpayer must complete Form 320.

    The Grow New Jersey Assistance Tax Credit is available to businesses creating or retaining jobs in New Jersey and making a qualified capital investment at a qualified business facility in a qualified incentive area as defined in the Grow New Jersey Assistance Act. This includes affiliates of the business located in the qualified business facility and tenants which are businesses in the qualified business facility. To be eligible for the program the chief executive officer or equivalent officer must demonstrate at the time of application to the Economic Development Authority that:
    1) The business must make a minimum of a $20,000,000 capital investment in a qualified business facility;
    2) The business must create or retain at least 100 fulltime employee positions which provide employee health benefits under a group health plan;
    3) The positions must be in an industry identified by the Economic Development Authority as desirable for New Jersey;
    4) The capital investment resultant from the award of tax credits and the resultant retention and creation of eligible positions will yield a net positive benefit to the State; and
    5) The award of the credit must be a material factor in creating or retaining the minimum number of employees.
    Partnerships are not allowed the credit directly, but the amount of credit of each partner shall be determined by allocating to each partner of the partnership that proportion of the credit of the business that is equal to the partner of the partnership's share, whether or not distributed, of the total distributive income or gain of the partnership for its tax period ending within or with the partner's tax period, or that proportion that is allocated by an a partnership agreement.

    The credit is $5,000 per year per qualified full-time position at the qualified business facility for a period of 10 years. An additional $3,000 per year per qualified full-time position for a period of 10 years where: 1) is an industry identified by the Economic Development Authority as desirable for the State to maintain or attract; 2) locates or relocates to a location within a qualified incentive area adjacent to, or within walking distance or short-distance-shuttle service of, a public transit facility, as determined by the Economic Development Authority; 3) creates jobs using full-time employees in eligible positions whose annual salaries, according to the Department of Labor and Workforce Development, are greater than the average full-time salary in this State, or 4) is locating to a project site that is or has been negatively impacted by the approval of a “qualified business facility,” as defined pursuant to section 2 of P.L.2007, c.346 (Urban Transit Hub Tax Credit Program).

    The annual tax credit available to each business shall not exceed the lesser of one tenth the capital investment or $4,000,000. The number of new full-time jobs for which a business receives a tax credit shall not exceed the number of retained full-time jobs for which a business receives a tax credit, unless the business qualifies by creating at least 100 new full-time jobs in an industry identified by the authority as desirable for the State to maintain or attract. The amount of credit allowed for a tax period to a business that is a tenant in a qualified business facility shall not exceed the business' total lease payments for occupancy of the qualified business facility for the tax period.

    The tax credit can be applied to 100% of the tax liability. The unused amount of the annual credit can be used during a 20 year carryforward. The business may also apply for a tax credit transfer certificate with the Division of Taxation to transfer unused tax credits from the Grow New Jersey Assistance Program from any year to sell the unused tax credits to another business. The tax credits must be sold for no less than 75% of the value of the tax credits, and the purchaser is subject to the same limitations and conditions of the seller of the tax credits.


  3. New Jobs Investment Tax Credit - Back to Top
    P.L. 1993, c.170, P.L. 2002, c.40, N.J.S.A. 54:10A-5.4 et seq., N.J.A.C. 18:7-3.22.  See 37 N.J.R. 1895(b) (May 16, 2005.) To claim this credit, the taxpayer must complete Form 304.

    The New Jobs Investment Tax Credit is taken in five equal annual installments. The annual credit cannot exceed 50% of that portion of the Corporation Business Tax liability which is attributable to and the direct result of the taxpayer’s qualified investment and shall not reduce the tax liability below the statutory minimum. This tax credit is available for investment in new or expanded business facilities that create new jobs in New Jersey.

    The investment must create at least 5 new jobs (50 for large businesses), and meet the median annual compensation requirement for the current tax year. New investment is not eligible for the credit unless the average value of all real and tangible personal property in this State has increased over the prior year. The facilities must have been purchased from an unrelated party during or after the taxpayer’s accounting period beginning on or after July 7, 1993, the effective date of this legislation. It must be employed by the taxpayer in a taxable activity and must not have been in use during the 90 day period prior to purchase. Investments which qualify for the Manufacturing Equipment and Employment Investment Tax Credit cannot also qualify for this credit.

    The new employee must be a New Jersey resident, hired to fill a regular, permanent position in this State which did not exist prior to the qualified investment, and would not exist but for the qualified investment. The employee must be unrelated to the taxpayer and must not have been employed by the taxpayer during the six months prior to the date the investment was placed in service or use. The taxpayer cannot claim a credit for a number of new employees that exceeds either the increase in the taxpayer’s average employment for the tax year, or one-half the taxpayer’s average employment for the year. Also, individuals counted in determining the New Jobs Factor must not be ones for whom the taxpayer is allowed an Urban Enterprise Zone or Urban Development Project Employees Tax Credit. A small or mid-sized business taxpayer must also meet the annual payroll and annual gross receipts requirements for the current tax year to qualify.   

    Although there is no carryover provision for this tax credit, the amount of the unused annual credit may be refunded to the taxpayer subject to certain limitations. If any amount of the aggregate annual credit remains after the above limitations are applied, that amount may be refunded to the taxpayer. The amount of the refund cannot exceed 50% of the sum of the property taxes paid in the tax year and the implicit property taxes paid through rent or lease payments which are attributable to and the direct result of the taxpayer’s qualified investment. N.J.S.A. 54:10A-5.7b(2).


  4. Urban Enterprise Credits - Back to Top

    Urban Enterprise Zone Employee Tax Credit - Back to Top
    N.J.S.A. 52:27H-78.  To claim the credit, a completed Form 300 must be attached to the tax return.

    This credit is available to a taxpayer that was certified as a qualified business in the preceding tax year as well as the current tax year. The amount of this credit in addition to the amount of any other tax credits taken is limited to 50% of the taxpayer’s total tax liability and cannot exceed an amount which would reduce the total tax liability below the statutory minimum. The credit is $1,500 if the employee was formerly unemployed or on public assistance; $500 if the employee meets the other qualifications but not these. Qualifying employees must have been hired after certification and must have worked six consecutive months in the tax year following the tax year in which employment began.

    Although there is a limitation of the amount of credit allowed in any one tax year, the amount of unused tax credit may be carried forward to a future tax year provided that the tax year falls within a 20 year period beginning with the date of designation of the enterprise zone, or if later, a period of 20 tax years beginning with the date within the designation period upon which the taxpayer is first subject to the Corporation Business Tax.

    Urban Enterprise Zone Investment Tax Credit Back to Top 
    N.J.S.A. 52:27H-86 and N.J.S.A. 52:27H-78c.  A completed Form 301 must be attached to the tax return to validate the investment tax credit claim.

    A qualified business which is not entitled to an employee tax credit may be entitled to the investment tax credit. This credit is only available to an employer with less than 50 employees. The investment must be at least $5,000 if there are 10 or fewer employees, and increases by $500 for each additional employee.

    Although there is a limitation of the amount of credit allowed in any one tax year, the amount of the unused tax credit may be carried forward to a future tax year provided that that tax year falls within a 20 year period beginning with the date of designation of the enterprise zone, or if later, a period of 20 tax years beginning with the date within the designation period upon which the taxpayer is first subject to the Corporation Business Tax Act

  5. UEZ-Impacted Business District - Back to Top
    P.L. 2001, c.347, N.J.S.A. 52:27H-66.2

    An impacted business district is an area negatively impacted by two adjacent UEZ’s. A qualified business within a UEZ-impacted business district is entitled to an exemption to the extent of 50% of sales tax to the same extent as that granted to qualified businesses in adjacent enterprise zones provided the business applies to the Director of the New Jersey Division of Taxation for certification, meets the eligibility criteria, and satisfies the annual certification requirements. However, no tax credits, incentives, programs, or benefits of the New Jersey Urban Enterprise Zone Act, other than the sales tax reduction are available to businesses in the UEZ impacted business district.

  6. Redevelopment Authority Project Tax Credit - Back to Top
    P.L. 1985, c.227, N.J.S.A. 55:19-13, N.J.A.C. 18:7-3.28. To claim the credit, the taxpayer must complete Form 302 and attach it to the tax return. Expires November 24, 2014.

    Any taxpayer that is actively engaged in the conduct of business at a location within a project as defined in N.J.S.A. 55:19-1 et seq., and whose business at that location consists primarily of manufacturing or other business that is not retail sales or warehousing oriented, may be entitled to claim the Redevelopment Authority Project Tax Credit.

    The credit is $1,500 each year for two years for new employees that were unemployed or on public assistance prior to joining a manufacturing company in the project area. The Redevelopment Authority Project Tax Credit is allowed in the tax year following the tax year of qualification, and may be continued into a second tax year if such qualification continues. Any credit which remains after the second tax year following the tax year of qualification is forfeited.


  7. Recycling Equipment Tax Credit - Back to Top
    P.L. 1987, c.102, N.J.S.A. 13:1E-96, N.J.S.A. 54:10A-5.3, N.J.A.C. 18:7-3.18
    To claim this credit, the taxpayer must complete Form 303

    A taxpayer that purchased qualified recycling equipment on or after October 1, 1987 and received a certification for this equipment from the Commissioner of the Department of Environmental Protection may be eligible to claim the Recycling Equipment Tax Credit. The recycling equipment must have been used exclusively within New Jersey, except for vehicles which must have been used primarily within New Jersey.

    ****The legislation governing this tax credit expired on December 31, 1996, however, any unused credits claimed prior to January 1, 1997, can be taken on the current tax return subject to the limitations set forth on Form 303. ****


  8. Manufacturing Equipment and Employment Investment Tax Credit - Back to Top
    P.L. 1993, c.171, P.L. 2001, c.399, N.J.S.A. 54:10A-5.16 et seq., N.J.A.C. 18:7-3.21, N.J.S.A. 54:32B-8.13b. To claim this credit, the taxpayer must complete Form 305 and attach it to the tax return.

    The Manufacturing Equipment and Employment Investment Tax Credit is a credit for acquisition of “manufacturing equipment” in New Jersey, as defined at N.J.S.A. 54:32B-8.13a and/or for an increase in New Jersey employees due to the equipment investment.  N.J.S.A. 54:10A-8.18 was amended by P.L. 2004, c.65, Section 25, to create a small business benefit of 4% of the investment credit base to a maximum credit of $1,000,000 targeted to taxpayers with 50 or fewer employees and entire net income of less than $5,000,000.

    The credit provides the taxpayer with incentive to increase employment at New Jersey locations by employing New Jersey residents. Investments in qualified manufacturing equipment made in tax years beginning on or after January 1, 1994, may be eligible for the Manufacturing Equipment and Employment Investment Tax Credit. Such investment has the benefit of allowing a tax credit computation for the tax year in which the investment was made as well as each of the following two tax years. Qualified equipment is defined in N.J.S.A. 54:32B-8.13(a) or in section 25 of P.L. 1980,c.105 (C.54:32B-8.13). The tax credit computation for the first year is based on the cost of the qualified manufacturing equipment placed in service in New Jersey during that tax year. The computations for the two following tax years are based on the average increase in New Jersey residents employed in New Jersey subject to a limitation based on the cost of the investment made in the first year. The credit allowable for any given year is limited to 50% of the taxpayer’s total liability, not to exceed an amount which would reduce the total tax liability below the statutory minimum. The manufacturing equipment portion is limited to 2% (or 4%, if applicable) of the investment credit base of qualified equipment placed in service in the tax year, up to a maximum allowed credit for the tax year of $1,000,000.

    The employment investment portion is valid for each of the two tax years succeeding the tax year for which the manufacturing equipment credit is allowed, but is limited to 3% of the investment credit base, not to exceed a maximum allowable amount for each of the two tax years of $1,000 multiplied by the increase in the average number of qualified employees.

    The amount of credit that cannot be applied for the tax year due to the applicable limitations may be carried over to the seven tax years following a credit’s tax year. Note, however, that a taxpayer may not carry over any amount of unused credit to a tax year during which a corporate acquisition, with respect to which a taxpayer was a target corporation, occurred or during which the taxpayer was a party to a merger or a consolidation. Credit attributable to property that is disposed of or ceases to be qualified equipment prior to the end of its categorized useful life the taxpayer shall redetermine the amount of credit allowed for the tax year of the credit by reducing the investment credit base by the cost of the amount of the disposed or disqualified equipment. If the redetermination of the credit results in an increase in tax liability for any period in which the credit was applied, then the amount of unpaid liability shall be considered a deficiency. The taxpayer would then be required to file an amended return.


  9. Research and Development Tax Credit - Back to Top
    P.L. 1993, c.175, N.J.S.A. 54:10A-5.24.  N.J.A.C. 18:7-3.23. Form 306

    A taxpayer that has performed qualified research activities in New Jersey may be eligible to claim the Research and Development Tax Credit. A credit for increased research activities is allowed based on qualified expenditures made in taxable years beginning on and after January 1, 1994.It provides a credit of 10% of the excess qualified research expenses over a base amount plus 10% of the basic research payments. Qualified research is limited to scientific experimentation or engineering activities designed to aid in the development of a new or improved product, process, technique, formula, invention, or computer software programs held for sale, lease, or license, or used by the taxpayer in a trade or business. For in-house research expenses (see Section 41(b)(2) of the Internal Revenue Code), this trade or business requirement will be met if the taxpayer’s principal purpose for conducting the research is to use the results of the research in the active conduct of a future trade or business (see Section 41(b)(4) of the Internal Revenue Code).

    If the research credit cannot be used because of tax liability limitations, it may be carried forward for either 7 or 15 years. Property and expenditures included in the calculation of the Research and Development Tax Credit are not permitted to be included in the calculation of the Recycling Equipment Tax Credit, the Manufacturing Equipment and Employment Investment Tax Credit or the New Jobs Investment Tax Credit. The fixed rate percentage ratio used will depend on whether the company already exists or whether it is a star-up company.

    For periods beginning on and after January 1, 2002, any deductions for research and experimental expenditures, to the extent that those research and experimental expenditures are qualified research expenses or basic research payments for which an amount of credit is claimed pursuant to section 1 of P.L.1993, c.175 (N.J.S.A. 54:10A-5.24) unless those research and experimental expenditures are also used to compute a federal credit claimed pursuant to section 41 of the Federal Internal Revenue Code of 1986, 26 U.S.C. s.41, if applicable, must be added back on Schedule A of the CBT-100, CBT-100S or BFC-1 return on the line for “Other deductions and additions”. Refer to the Schedule A instructions for the appropriate return. Form 306 lists specific instructions on calculating the fixed rate percentage ratio.

    For periods beginning on or after January 1, 2012, the amount of the credits applied cannot reduce the tax liability to an amount less than the statutory minimum tax.


  10. Small New Jersey Based High Technology Business Investment Tax Credit- Back to Top
    P.L. 1997, c.349; N.J.S.A. 54:10A-5.28 to 30.  Form 308

    The purpose of the Small New Jersey-Based High-Technology Business Investment Tax Credit Act is to encourage corporate taxpayers to invest in small New Jersey-based high-technology businesses thereby providing them with the needed funds for research and development and pilot scale manufacturing required to develop marketable products and services.

    The taxpayer shall be allowed a credit against the tax in an amount equal to 10% of the qualified investment made by the taxpayer during each of the three years beginning on or after January 1, 1999, in a small New Jersey-based high-technology business, up to a maximum allowed credit of $500,000 for the tax year for each qualified investment made by the taxpayer.

    Small New Jersey-based high-technology business are corporations doing business, employing or owning capital or property, or maintaining an office, in New Jersey that has qualified research expenses paid or incurred for research conducted in New Jersey or conducts pilot scale manufacturing in New Jersey, and has fewer than 225 employees, of whom 75% are New Jersey-based employees filling a position or job in New Jersey for funds on which a credit is allowed under this law.

    The credit allowable for any given tax year is limited to 50% of the taxpayer’s total tax liability, not to exceed an amount which would reduce the total tax liability below the statutory minimum. A research and development tax credit shall not be allowed for expenses paid from funds for which a small New Jersey-based high-technology tax credit is allowed, or which are includable in the calculation of the allowed amount of this tax credit.

    Any unused credit may be carried over for fifteen years following a credit’s tax year. However, a taxpayer may not carry over any amount of unused credit to a tax year during which a corporate acquisition, with respect to which a taxpayer was a target corporation, occurred or during which the taxpayer was a party to a merger or a consolidation.


  11. Neighborhood Revitalization State Tax Credit - Back to Top
    P.L. 2001, c.415,  P.L. 2003, c.59, N.J.S.A. 52:27D-492, N.J.A.C. 18:7-3.27, N.J.S.A. 52:27D-499, N.J.S.A. 52:27D-496.
    To claim this credit, the taxpayer must complete Form 311 and attach it to the tax return.

    A taxpayer that contributes financial assistance to a nonprofit sponsor may be granted a certificate authorizing a tax credit which may be used to offset their corporation business tax liability. The tax credit may be granted in an amount up to 50% of the approved assistance provided to a nonprofit organization to implement a qualified project that is part of an approved neighborhood preservation and revitalization plan. The credit may not exceed $500,000 for any taxable year. There are no carryover provisions for this tax credit. Any unused tax credits are forfeited.


  12. Effluent Equipment tax Credit - Back to Top
    P.L. 2001, c.321, N.J.S.A.54:10A-5.31, N.J.A.C. 18:7-3.24, N.J.S.A. 54:10A-5.32, N.J.A.C. 7:14D-1.1 et seq.  Form 312

    This is a credit for the purchase of certain equipment used in treatment of effluent for reuse in an industrial process.  The credit is applicable to purchases made in privilege periods beginning on or after July 1, 2002.  N.J.A.C. 7:14D provides for determination of environmental benefit of the reuse of further treated effluent in industrial facilities. A taxpayer that purchases treatment or conveyance equipment for use in treatment of effluent for reuse in an industrial process exclusively within New Jersey may be able to take a tax credit.

     The credit is equal to 50% of the cost of the treatment equipment or conveyance equipment less the amount of any loan received and excluding the amount of sales and use tax. The amount of credit claimed for the privilege period in which the purchase is made and the amount of credit claimed therefore in each privilege period thereafter shall not exceed 20% of the amount of the total credit allowable. A copy of the determination of environmentally beneficial operation issued by the Department of Environmental Protection along with an affidavit affirming the equipment will only be used in New Jersey must be filed with the tax return. Unused tax credits may be claimed in subsequent tax years subject to the limitations set forth in form 312.


  13. Economic Recovery Tax Credit- Back to Top
    P.L. 2002, c.43, sections 54-57, N.J.S.A. 52:27BBB-53 to 56, N.J.A.C. 18:7-3.25.  Form 313. Expires November 2014.

    The purpose of the Economic Recovery Tax Credit is to foster business investment in qualified municipalities established under the authority of the "Qualified Municipality Open For Business Incentive Program". A taxpayer that is engaged in the conduct of business within a qualified municipality and is not receiving a benefit under the New Jersey Urban Enterprise Zones Act, P.L.1983, c.303 (C.52:27H-60 et seq.) may apply to receive a tax credit against the amount of tax otherwise imposed under the Corporation Business Tax Act.

    The credit is equal to $2,500 for each new full-time position at that location in credit year one and $1,250 for each new full-time position at that location in credit year two. No taxpayer shall be allowed more than a single 24 month continuous period in which credits shall be allowed for activity at a location within a qualified municipality. The credit allowable under this section shall not exceed 50% of the tax liability otherwise due and shall not reduce the tax liability to an amount less than the statutory minimum.

    Any unused credit may be carried forward, if necessary, for use in the five privilege periods following the privilege period for which the credit is allowed. The credit allowed for credit year one may be refundable at the close of the privilege period in which or with which credit year two ends. The amount of the credit received for credit year one remaining, if any, after the liabilities for the privilege period in which or with which credit year two ends and for any prior privilege period have been satisfied, multiplied by the sustained effort ratio, shall be an overpayment for the purposes of section N.J.S.A. 54:49-15 for the privilege period in which or with which credit year two ends; that amount of the credit received for credit year one remaining, if any, that is not an overpayment may be carried forward.


  14. AMA Tax Credit - Back to Top
    P.L. 2002, c.40, section 7, N.J.S.A. 54:10A-5af.  N.J.A.C. 18:7-18.5.  To claim the AMA Tax Credit, the taxpayer must complete Form 315 and attach it to the return. Expires November 24, 2014.

    For taxable periods beginning on or after January 1, 2002, if a taxpayer incurs an AMA (Alternative Minimum Assessment) liability in excess of the regular corporation business tax liability, the excess may be carried over to subsequent years and used as a credit against the regular corporation business tax liability. The carryovers never expire subject to certain limitations. The credit taken shall not reduce the taxpayer’s corporation business tax liability to less than the Alternative Minimum Assessment, nor to below 50% of the regular corporation business tax liability otherwise due, nor to below the minimum tax due ($500 or $2,000). In addition, other higher priority credits available to the taxpayer per Schedule A-3 must be used before taking the AMA credit.

    If a key corporation is remitting AMA for a controlled group, only the key corporation may take the AMA Tax Credit. New Jersey S corporations which formerly filed as C corporations and had an AMA liability can take the AMA credit on the CBT-100S tax return subject to the same rules as stated above.


  15. Business Retention and Relocation Assistance Act - Back to Top
    P.L. 1996, c.25, P.L. 2004, c.65, P.L. 2010, c.123, N.J.S.A. 34:1B-112 et seq.  Form 316

    The purpose of the program is to encourage economic development and job creation and to preserve jobs that currently exist in New Jersey but which are in danger of being relocated to premises outside of the State. To qualify for a grant of tax credits, a business shall demonstrate that the business will either relocate to or maintain facilities in New Jersey and that the relocation/retention* of  at least 50 employees and capital investments have a net positive effect on New Jersey. The business shall also demonstrate that the receipt of assistance will be a material factor in the business' decision not to relocate outside of New Jersey; provided however, that a business that relocates 1,500 or more retained full-time jobs covered by a project agreement from outside of a designated urban center to one or more new locations within a designated urban center shall not be required to make such a demonstration if the business applies for a grant of tax credits within six months of signing its lease or purchase agreement.

    The credit and bonus awards are determined based on a tiered system depending on the number of employees relocated or retained. The bonus award is equivalent to 50% of the amount of the original grant of tax credits, and shall be made to any business that relocates more than 2,000 full-time employees covered by the project agreement from one or more locations outside of a designated urban center into a designated urban center where all other applicable requirements of P.L.1996, c.25 (N.J.S.A.34:1B-112 et seq.)* are satisfied; and provided further that no grant of tax credits shall be awarded pursuant to this section for any job that is moved from its current location in an urban enterprise zone designated pursuant to the "New Jersey Urban Enterprise Zones Act," P.L.1983, c.303 (N.J.S.A.52:27H-60 et seq.) to a location that is not within an urban enterprise zone; however, that if the move from the urban enterprise zone is to a facility already owned or leased by the same business and that business already employs at least the same number of persons as those being relocated from the urban enterprise zone a grant of tax credits may still be awarded.

    Pursuant to P.L. 2010, c. 123, an additional bonus exists for qualified capital investments equivalent to at least twice the value of the credits pursuant to section 7 of P.L. 2004.c.65. Where the bonus award results in the disqualification of the capital investment, the bonus award will be equal to the largest amount that would still result in a qualified capital investment.


  16. * Added by P.L. 2010, c. 123*
    ** P.L. 2010, c. 123 also added language clarifying qualified employees, qualified investments, and added a tiered system of tax credits based on the number of employees**

  17. Sheltered Workshop Tax Credit - Back to Top
    P.L. 2005, c.318, N.J.S.A 54:10A-5.38  To claim this credit, the taxpayer must complete Form 317 and attach it to the tax return.

    A taxpayer that provides employment to qualified handicapped persons at sheltered workshops may be able to claim this tax credit. In general, the credit is allowed in an amount equal to 20% of the salary and wages paid during the privilege period for the employment of a qualified person not to exceed $1,000 for each qualified person for the privilege period.

    The amount of the tax credit that cannot be applied to the current tax period due to the applicable limitations can be carried over to the seven privilege periods following the privilege period for which the credit was allowed.


  18. Film Production and Digital Media Tax Credit - Back to Top
    N.J.S.A. 54:10A-5.39. P.L. 2005, c. 345, P.L. 2007, c. 257, P.L. 2010, c. 20(suspends this credit for New Jersey State fiscal year 2011)  To claim this credit, the taxpayer must complete Form 318 and attach it to the tax return. Set to expire with privilege periods and taxable years commencing after July 1, 2015

    In general, a credit is allowed in an amount equal to 20% of the qualified film production expenses paid by the taxpayer during the privilege period, provided that at least 60% of the total production expenses (other than post-production) were for services performed or goods used in New Jersey, and provided that the principal photography began within 150 days after the credit application was approved. The credit is also allowed in an amount up to 20% of the qualified digital media content production expenses provided that at least $2,000,000 of the expenses were for services performed or goods used in New Jersey.

    This credit may be claimed for qualified film production expenses incurred on or after January 12, 2006 and/or qualified digital media content production expenses incurred on or after January 11, 2008. The amount of the credit applied under N.J.S.A. 54:10A-5.39 against the corporation business tax for a privilege period, when taken together with any other credits allowed against that tax, shall not exceed 50 percent of the tax liability otherwise due and shall not reduce the tax liability to an amount less than the statutory minimum.

    The amount of the tax credit that cannot be applied to the current tax period due to the applicable limitations can be carried over to the seven privilege periods following the privilege period for which the credit was allowed.


  19. Offshore Wind Economic Development - Back to Top
    P.L. 2010, c. 57, N.J.S.A. 32:1B-209.4

    Credit awarded to businesses for offshore wind energy facilities approved by the Economic Development Authority. The business must have at least $50,000,000 in capital investments into a qualifying facility. A tenant of the business can qualify if there at least $17,500,000 in capital investments made in the area being leased in the qualifying facilities. Additionally, 300 new fulltime employees who are subject to the New Jersey Gross Income Tax or are from a state which has reciprocity with New Jersey, must have been hired that do not qualify for certain other tax credits as enumerated in N.J.S.A. 34:1B209.4(3).

    The tax credit shall be taken over the course of 10 years at a rate of one-tenth of the value of the total credit for each accounting or privilege period starting with the period the business was approved by the EDA. The tax credit allowed for a tax period for a tenant, can not exceed the value of the lease payments for occupancy of the qualified wind energy facility. The credit amount for any tax period during which the documentation of a business' credit amount remains unapproved will be forfeited, although credit amounts for the remainder of the years of the 10-year credit period shall remain available. 

    The business can not take a tax credit for the same capital and employees if the business receives assistance pursuant to the Business Retention and Relocation Assistance Act. If the business is allowed the credit, it will not be eligible for incentives authorized pursuant to the Municipal Rehabilitation and Economic Recovery Act.


  20. Urban Transit Hub - Back to Top
    P.L. 2007, c. 346, P.L. 2009, c. 90, P.L. 2011, c. 149, N.J.S.A 34:1B-207 et. seq.

    An urban transit hub is a property located within a 1/2 mile to an interstate rail station; property adjacent to, or connected by rail spur to a freight rail line if the business utilizes that freight line for loading and unloading freight cars on trains; all light rail stations; property located within a one mile radius of the midpoint of the platform area of such a rail station if the property is in a qualified municipality under the "Municipal Rehabilitation and Economic Recovery Act," P.L.2002, c.43 (C.52:27BBB-1 et seq.) or in an area that is the subject of a Choice Neighborhoods Transformation Plan funded by the federal Department of Housing and Urban Development; a site of the campus of an acute care medical facility located within a one mile radius of the midpoint of the platform area of such a rail station; and a site of a closed hospital located within a one mile radius of the midpoint of the platform area of such a rail station.

    A credit may be awarded to businesses for capital investments made in qualified business facilities that are located within eligible municipalities approved by the Economic Development Authority. The business must have at least $50,000,000 in capital investments into a qualifying facility. A tenant of the business can qualify if there at least $17,500,000 in capital investments made in the area being leased in the qualifying facilities. Additionally, 250 new fulltime employees, who are subject to the New Jersey Gross Income Tax or are from a state which has reciprocity with New Jersey, must have been hired. The 250 employee threshold can be met by an aggregate of no more than three tenants.

    The tax credit shall be taken over the course of 10 years at a rate of one-tenth of the value of the total credit for each accounting or privilege period starting with the period the business was approved by the Economic Development Authority and is available for twenty-year carryforward. The tax credit allowed for a tax period for a tenant, can not exceed the value of the lease payments for occupancy of the qualified wind energy facility. The credit amount for any tax period during which the documentation of a business' credit amount remains unapproved will be forfeited, although credit amounts for the remainder of the years of the 10-year credit period shall remain available.
  21. The business shall not be allowed tax credits under this section if the business participates in a business employment incentive grant relating to the same capital and employees that qualify the business for this credit, or if the business receives assistance pursuant to P.L.1996, c.25 (C.34:1B-112 et seq.), or if the business is a licensee as defined pursuant to section 33 of P.L.1977, c.110 (C.5:12-33). A business that is allowed a tax credit under this section shall not be eligible for incentives authorized pursuant to P.L.2002, c.43 (C.52:27BBB-1 et al.). InvestNJ Business grantees may not qualify for an Urban Transit Hub Tax Credit.

  22. Environmental Opportunity Zones - Back to Top
    P.L. 1995, c.413, N.J.S.A. 54:4-3.150 et seq. 
    If the taxpayer claims this credit on Form CBT-100, Form CBT-100S or Form BFC-1, a completed Form 314 must be attached to the return to validate the claim.

    Municipalities may designate by ordinance one or more qualified real properties in that municipality as environmental opportunity zones.  N.J.S.A. 54:4-3.153.  Tax exemption applications are made pursuant to N.J.S.A. 54:4-3.155.

    The taxpayer shall be allowed a credit in an amount equal to 100% of the eligible cost of the remediation of a contaminated site as certified by the Department of Environmental Protection pursuant to section 2 of P.L. 2003, c.296 and the Director of the Division of Taxation in the Department of Treasury pursuant to section 3 of P.L. 2003, c.296. The remediation costs must have been performed during the privilege periods beginning on or after January 1, 2004 and before January 1, 2007.

    In no event shall the amount of the tax credit when taken together with the property tax exemption received pursuant to the "Environmental Opportunity Zone Act," P.L.1995, c.413 (C.54:4-3.151), less any in lieu of tax payments made pursuant to that act, or any other State, local, or federal tax incentive or grant to remediate a site, exceed 100% of the total cost of the remediation.

    The credit allowable under this section shall not exceed 50% of the tax liability otherwise due and shall not reduce the tax liability to an amount less than the statutory minimum. Any unused credit may be carried forward, if necessary, for use in the five privilege periods following the privilege period for which the credit is allowed.


  23. Other Business Incentives

  24. CBT Tax Benefit Certificate Transfer Program - Back to Top
    P.L. 1997, c.334, P.L. 1999, c.140, P.L. 2004, c.65, P.L. 2009, c. 90, N.J.S.A. 34:1B-7.42a et seq.

    The corporation business tax benefit certificate transfer program allows new or expanding emerging technology and biotechnology companies in New Jersey with unused amounts of research and development tax credits otherwise allowable which cannot be applied for the tax year and unused net operating loss carryover, to surrender those tax benefits for use by other corporation business taxpayers in this State, provided that the taxpayer receiving the surrendered tax benefits is not affiliated with a corporation that is surrendering its tax benefits under the program. The tax benefits may be used on the corporation business tax returns to be filed by those taxpayers in exchange for private financial assistance to be provided by the corporation business taxpayer that is the recipient of the corporation business tax benefit certificate to assist in the funding of costs incurred by the new or expanding emerging technology and biotechnology company. The maximum lifetime value of surrendered tax benefits that a corporation shall be permitted to surrender pursuant to the program is $15,000,000. 

    The amount of financial assistance must be equal to at least 80% of the amount of the surrendered tax benefit. If the total amount of transferable tax benefits requested to be surrendered by approved applicants exceeds the statutory amount for the State fiscal year, the authority, in cooperation with the Division of Taxation in the Department of the Treasury, shall not be authorized to approve the transfer of more than the statutory limit for that State fiscal year and shall allocate the transfer of tax benefits by approved companies. Half of the amount is allocated to innovations zones.

    The new or expanding emerging technology or biotechnology company will be ineligible where it: (1) has demonstrated positive net operating income in any of the two previous full years of ongoing operations as determined on its financial statements issued according to generally accepted accounting standards endorsed by the Financial Accounting Standards Board; or (2) is directly or indirectly at least 50 percent owned or controlled by another corporation that has demonstrated positive net operating income in any of the two previous full years of ongoing operations as determined on its financial statements issued according to generally accepted accounting standards endorsed by the Financial Accounting Standards Board or is part of a consolidated group of affiliated corporations, as filed for federal income tax purposes, that in the aggregate has demonstrated positive net operating income in any of the two previous full years of ongoing operations as determined on its combined financial statements issued according to generally accepted accounting standards endorsed by the Financial Accounting Standards Board.

    **Pursuant to N.J.S.A. 54:10A-5.24aa, the purchaser of the benefit certificate must attach the certificate to any return the taxpayer is required to file.**


  25. CBT and Insurance Premiums Tax Credits Transfer Program - Back to Top
    P.L. 2004, c.65, sec. 17, N.J.S.A. 34:1B-120.2

    Corporation business tax credit and insurance premiums tax credit certificate transfer program that allows businesses in New Jersey with unused amounts of tax credits to surrender those tax credits for use by other corporation business and insurance premiums taxpayers in New Jersey, provided that the taxpayer receiving the surrendered tax credits is not affiliated with the business that is surrendering its tax credits.

    The tax credits may be used on the corporation business tax and insurance premiums tax returns to be filed by those taxpayers in exchange for private financial assistance to be provided by the corporation business taxpayer or insurance premiums taxpayer that is the recipient of the corporation business tax credit certificate or insurance premiums tax credit certificate to assist in the funding of costs incurred by the relocating business in exchange for private financial assistance to be made by the taxpayer in an amount equal to at least 75% of the amount of the surrendered tax credit of a business relocating in the State.

    The private financial assistance shall assist in funding expenses incurred in connection with the operation of the business in the State, including but not limited to the expenses of fixed assets, such as the construction and acquisition and development of real estate, materials, start-up, tenant fit-out, working capital, salaries, research and development expenditures and any other expenses determined by the commissioner to


  26. Health Enterprise Zones - Back to Top
    P.L. 2004, c.139, N.J.S.A. 54A:3-7.

    Where the tax payer practices in a designated Health Enterprise Zone, the tax payer is allowed to deduct from the taxpayer's gross income in a taxable year an amount equal to that proportion of the taxpayer's net income deriving from that practice for the taxable year that the qualified receipts of that practice for the taxable year bear to the total amount received for services at that practice for the taxable year.


  27. Brownfield Sites - Back to Top 
    P.L. 1997, c.278, and amended by P.L. 2002, c.87, N.J.S.A. 58:10B-1.1, N.J.S.A. 58:10B-28, N.J.S.A. 58:10B-30.

    The Brownfield Site Remediation Fund is dedicated to the purpose of reimbursing developers up to 75% of their remediation costs through redevelopment agreements with the New Jersey Economic Development Authority and the State Treasurer. These reimbursement moneys would be derived from certain new specific State tax revenue that is realized from the redevelopment project. Upon application for reimbursement, the Director is required to certify eligibility of reimbursement has been achieved. 


  28. Business Employment Incentive Grant - Back to Top
    P.L. 1996, c.26, P.L. 2003, c. 166, N.J.S.A. 34:1B-124 et seq.  N.J.S.A. 34:1B-129, N.J.S.A. 34:1B-118.

    This is a grant awarded by the EDA where the business meets certain enumerated criteria. A business may apply to the authority for a grant for any project which: will create at least 25 eligible positions in the base years; or will create at least 10 eligible positions in the base years if the business is an advanced computing company, an advanced materials company, a biotechnology company, an electronic device technology company, an environmental technology company, or a medical device technology company. In the case of a business which is a landlord, the business may apply to the authority for a grant for any project in which at least 25 eligible positions are created in the base years.

    A project which consists solely of point-of-final-purchase retail facilities shall not be eligible for a grant under this act. If a project consists of both point-of-final-purchase retail facilities and non-retail facilities, only the portion of the project consisting of non-retail facilities shall be eligible for a grant, and only the withholdings from new employees which are employed in the portion of the project which represents non-retail facilities shall be used to determine the amount of the grant. If a warehouse facility is part of a point-of-final-purchase retail facility and supplies only that facility, the warehouse facility shall not be eligible for a grant. For the purposes of this act, catalog distribution centers shall not be considered point-of-final-purchase retail facilities.


  29. Net Operating Loss - Back to Top
    P.L. 1997, c.350, P.L. 1997, c.351, P.L. 2002, c.40, P.L. 2004, c.47, P.L. 2008, c.102, N.J.S.A. 54:10A-4.3, N.J.S.A. 54:10A-5.24b. Form 500

    Certain taxpayers are allowed the carry forward of the net operating loss under the CBT, P.L. 1997, c.350, N.J.S.A. 54:10A-4.3.  The statute allows a 15 year carry forward of losses related to IRC section 41 research expenses for certain high technology businesses.  Section 2 of c.350 provides that this applies only to net operating losses that occur during privilege periods that begin on or after July 1, 1998, but no later than June 30, 2001. 

    P.L. 1997, c.351, N.J.S.A. 54:10A-5.24b extends the carry forward of the research and development tax credit against CBT for certain taxpayers.  The statute allows unused portions of the research credit for certain defined expenses to be carried forward for 15 years. Under N.J.S.A. 54:10A-5.30 this credit applies to qualified investment made in three tax years: between January 1, 1999 and ending December 31, 2001. 

    P.L. 2002, c.40 (Business Tax Reform Act) disallows Net Operating Loss deductions for privilege periods beginning during calendar years 2002 and 2003. For any portion of NOL’s which would have been deducted in such privilege periods, but were disallowed by the Business Tax Reform Act, and would have expired in such privilege periods, the expiration is extended by two years.

    P.L. 2004, c.47 allows, for privilege periods beginning in 2004 and 2005, a Net Operating Loss deduction not to exceed 50% of entire net income. For any portion of NOL’s which would have been deducted in such privilege periods, but were disallowed by P.L. 2004, c. 47, and would have expired in such privilege periods, the expiration is extended by a period equal to the period that the NOL deduction was disallowed. A full Net Operating Loss deduction is allowed for privilege periods beginning on or after January 1, 2006.

    P.L. 2008, c.102, signed into law November 24, 2008, created a new net operating loss carryover under the Corporation Business Tax. The law provides that a net operating loss for any privilege period ending after June 30, 2009 shall be a net operating loss carryover to each of the twenty privilege periods following the period of the loss. This new twenty year carryover applies only to net operating losses accruing for privilege periods ending after June 30, 2009. Net operating losses accruing for privilege periods ending before June 30, 2009 continue to have a net operating loss carryover to each of the seven privilege periods following the period of the loss.

Last Updated: Wednesday, 12/26/12



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