Business Tax Incentives to Help Companies Grow
Thinking about starting, relocating or growing a business? New Jersey offers powerful business tax incentives that can help you take your company to the next level.
Created by the New Jersey Economic Opportunity Act of 2013, the Grow New Jersey Assistance Program (Grow NJ) and the Economic Redevelopment and Growth Program (ERG) have helped new and relocating companies create thousands of new jobs here, while helping New Jersey companies invest and grow in the State.
We know you’ll find our tax incentives very competitive with programs offered by neighboring states.
Grow New Jersey Assistance Program (Grow NJ)
A powerful job creation and retention program, Grow NJ helps qualified companies, both large and small, blossom in New Jersey.
Companies in all industries may qualify for tax breaks under the Grow NJ Assistance Program. Technology start-ups (including biotech companies) and manufacturers may qualify for tax incentives by creating as few as 10 full-time jobs or retaining 25 full-time jobs. Companies in targeted industries – transportation, defense, energy, logistics, life sciences, technology, health and finance – may qualify by creating as few as 25 new jobs or retaining 35 jobs.
Tax credits for qualified projects range from $500 to $5,000 per job, per year, over 10 years. A number of bonus credits, each ranging from $250 to $5,000 per job, per year, may be available if the project meets certain requirements, such as location in an urban area, or high job-creation levels. Maximum awards can reach as high as $15,000 per job, per year
In Garden State Growth Zones (Camden, Trenton, Passaic, Paterson and Atlantic City) and 8 South Jersey counties, minimum full-time employment requirements are 1/4 lower and minimum capital investment requirements are 1/3 lower. Projects may qualify by either creating or retaining full-time jobs.
The highest levels of base credits are for projects located in Garden State Growth Zones, Urban Transit Hub Municipalities and “mega projects”.
New Jersey and New York Program Comparison
Grow New Jersey Assistance Program
- Corporate income tax credits available up to 10 years
- Unused tax credits transferable and saleable at a discount
- Minimum of 10 to 50 new or retained jobs, depending on industry type
- Jobs can be new to NJ or retained in state (retained jobs allowed only 50% of credit value)
- Capex based on investment per square foot (psf) ($20 psf to $120 psf, depending on project type)
- Incentives available across the state
- No limits on building square footage
- All industries eligible, with bonus for target industries
- Base awards from $500 to $5,000 per job, per year, for up to 10 years
- Bonuses in Garden State Growth Zone (GSGZ) Cities; Urban Transit Hub (UTH) cities, distressed cities; and 8 southern NJ counties
- Bonus awards of $250 to $3,000 per employee, per year, based on factors such as location, industry, salary levels, capex, # of jobs, environmental investment
- Approved incentives amount based on net benefits test for NJ.
- No capex minimums
- No job number minimums, but new jobs to NY must be created
- No corporate income tax, real property tax, sales tax, employee income tax for up to 10 years
- Incentives only available in specific locations associated with a state or private college. Depending on location of college, only space on-campus or within 1 mile can be used
- Space limited to 200,000sf in any one location
- Business must be allied with school’s academic mission
- All industry types eligible except retail, wholesale, law, accounting,retail banking, medical, utilities, real estate management, restaurants, hospitality
- In Downstate locations, businesses must be high-tech or start-up.
Economic Redevelopment and Growth
ERG provides incentive grants to developers and businesses to address revenue gaps in development projects, defined as having insufficient revenues to support the project debt service under a standard financing scenario. It can also apply to projects that have a below market development margin or rate of return.
For commercial projects, incentive grant reimbursement of up to 20% of total project cost is available, with a bonus of 20% available for projects in Garden State Growth Zones. Therefore, the total tax credit may equal up to 40% of total project costs, not to exceed an average of 85% of the project’s annual incremental revenues. Additional requirements, including a comprehensive net benefit analysis to verify that the revenues the State receives will be greater than the incentive, apply to commercial projects under ERG.
Bond Financing, Direct Loans and More
New Jersey also offers a variety of other programs to help companies here flourish, including: low-cost financing through tax-exempt bonds; direct loans; and, loan participations/guarantees. Plus, the State offers specialized programs to support emerging technology and biotech companies.
For more information about Grow NJ, ERG and other programs to support your business, visit the New Jersey Economic Development Authority website.