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The New Jersey Economic Stimulus Act of 2009

P.L.2009, c. 90, signed into law on July 28, 2009 became effective immediately with the exception of sections 9 and 11 which became effective on October 1, 2009. This was an omnibus bill to reinvigorate New Jersey’s economy, consisting of eight actions; six of them are specific to the Division of Taxation. There are numerous technical and administrative changes in this Act. For details, the reader should read the law in its entirety. The Act addresses the following:
  1. Economic Redevelopment and Growth Grant Program;
    1. This segment of the Act authorizes the awarding of State and local incentive grants to developers in qualifying economic redevelopment and growth grant incentive areas to fill in their project financing gap.

  2. Authorization for certain municipalities to impose special taxes and surcharges to fund redevelopment activities and certain programs;
    1. Municipalities with a population over 100,000 and a commercial airport with over 10 regularly scheduled flights per day may impose a 5% tax on the rental fee of motor vehicles to mainly fund redevelopment plan activities.
    2. This Act also allows 2nd class cities with a major place of amusement to impose a surcharge up to $2 on each admission charge subject to New Jersey Sales Tax and a $
    3. 2 charge on parking at that place of amusement for the benefit of senior citizen and youth health and recreational purposes.

  3. Modifications to the current Emerging and Biotechnology credit transfer program;
    1. An eligible entity may surrender any credit which cannot be applied to its liability, or surrender any unused net operating los carryover to certain other corporations.
    2. A recipient of surrendered tax benefits must pay at least 80% (formerly 75%) of the value of such benefits.
    3. The Economic Development Authority is limited, annually, to $60 million of credit transfer approvals, and along with the Division of Taxation, must manage the allocation of the credit transfer approvals pursuant to a modified formula.
    4. The innovation zone portion of the credit allocation increases to $10 million (formerly $5 million) and is specifically set aside for emerging technology and biotechnology companies; unused portions of the emerging technology and biotechnology transfer credit program may be allocated outside of the designated innovation zones.
    5. The maximum lifetime value of credit transfers for any one eligible corporation increases from $10 million to $15 million.
    6. Allows for a credit recapture program to recoup remaining value of surrendered credit if entity fails to use the proceeds for its statutorily intended purpose(s).

  4. Expansion of eligibility and tax credit limits under the “Urban Transit Hub Tax Credit Act” (UTHTCA);
    1. A business must demonstrate at the time of its application that the State’s financial support will yield a net positive benefit to both the State and the eligible municipality.
    2. All credits approved under the program are now capped at $1,500,000,000.
    3. The ‘full-time employee’ requirement may consist of contract workers and the inclusion of out-of-State residents.
    4. A business may use an affiliate to satisfy the employment or capital investment requirements.
    5. “Urban transit hub” definition expanded to include:
      1. (1) property located within a 1/2 mile to an interstate rail station;
      2. (2)   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; and
      3. (3)   all light rail stations.
    6. The capital investment threshold is reduced from $75,000,000 to $50,000,000 for an owner of a qualified business facility, and from $50,000,000 to $17,500,000 for a tenant that occupies a leased area of the qualified business.
    7. Tenant investment may be included in the capital investment calculation for the qualified business facility.
    8. Allows for the aggregation of up to three tenants to meet the 250 employee requirement.
    9. InvestNJ Business grantees may not qualify for an Urban Transit Hub Tax Credit.
    10. The Statewide full-time workforce reduction trigger requiring mandatory forfeiture of an annual tax credit is now 20 percent.
    11. Business headquarters property may now become a qualified investment facility if it meets certain criteria.
    12. S-corporation shareholders and limited liability corporation members may no longer be permitted to participate in the program. A qualified individual who is a holder of a credit may sell it under the tax credit transfer certificate program pursuant to the guidelines established in the Act.
    13. Casino licensees now only qualify for benefits for casinos.
    14. The credit shall be reduced by 20 percent if less than 200 employees are employed.
    15. The credit shall be reduced by 20 percent if less than 200 employees are employed.
    16. The New Jersey Economic Development Authority is required to set standards to encourage “green building”.

  5. Relief to certain developers otherwise subject to the “Statewide Non-Residential Fee Act” and Grants to municipalities for affordable housing;
    1. Temporarily exempts property that received a site plan approval before July 1, 2010 and a permit for construction prior to July 1, 2011 from the 2.5 percent non-residential development fee imposed by the “Statewide Non-Residential Fee Act” (P.L.2008, c.46 (N.J.S.A. 40:55D-8.1 through 40:55D-8.7).  These amendments to the act are not intended to change the provisions of N.J.S.A. 40:55D-8.7, which void and prohibit municipal ordinances that seek to impose obligations on non-residential development for the purposes of providing affordable housing.
    2. Developers may apply to the approving authority for full or partial fee refunds.
    3. $15 million is appropriated to the “New Jersey Affordable Housing Trust Fund” from the General Fund, and the Act permits the transfer of a portion of the appropriation to the “Urban Housing Assistance Fund,” established by N.J.S.A. 52:27D-329.7 is permitted.

  6. Sales tax exemption on the receipts for the use of energy by certain postconsumer material manufacturing facilities.
    1. Receipts from the sale or use of energy and utility service to or by a postconsumer material manufacturing facility for use or consumption directly and primarily in the production of tangible personal property, other than energy, are exempt from the state sales and use tax and certain transitional energy facility assessment (TEFA) charges during the period beginning on or after January 1, 2010 but ending on or before January 1, 2017.
    2. During the period for which the sales tax and TEFA exemptions are granted herein, the seller of such energy and utility service to an eligible postconsumer material manufacturing facility must charge the sales tax and TEFA on such purchases.  The eligible postconsumer material manufacturing facility may then file a claim for refund with the Division of Taxation pursuant to the guidelines established within the Act.

Last Updated: Wednesday, 08/20/14

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