Assembly Commerce and Economic Development Committee Statement to Assembly, No. 1679 (May 5, 2021)

Summary

Assembly Commerce and Economic Development Committee statement to Assembly, No. 1679, State of New Jersey, dated May 5, 2021, reporting Assembly Bill No. 1679 favorably. The bill establishes a New Jobs for New Jersey tax credit program, administered by the Commissioner of Labor and Workforce Development, to provide incentives to small private sector employers who increase their workforce by hiring unemployed workers. An employer of 100 or fewer full-time employees is eligible for a refundable tax credit for each eligible individual employed full-time, equal to the employer payroll taxes paid during that tax year with respect to that individual. As reported, the bill is identical to Senate Bill No. 1958.

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ASSEMBLY COMMERCE AND ECONOMIC DEVELOPMENT
                COMMITTEE

                         STATEMENT TO

                     ASSEMBLY, No. 1679


       STATE OF NEW JERSEY
                            DATED: MAY 5, 2021

          The Assembly Commerce and Economic Development Committee
      reports favorably Assembly Bill No. 1679.
         This bill establishes a New Jobs for New Jersey tax credit
      program to be administered by the Commissioner of Labor and
      Workforce Development. The purpose of the program is to provide
      incentives to small private sector employers who increase their
      workforce by hiring unemployed workers.
         The bill makes an employer of 100 or fewer full-time employees
      eligible for a refundable New Jobs for New Jersey tax credit against
      the corporation business tax or the gross income tax, whichever
      applies to the employer, for each eligible individual employed by
      the employer on a full-time basis during a tax year, if the following
      requirements are met:
         1. The eligible individual is hired by the employer after April
      1, 2021, is employed full-time during the tax year for which the tax
      credit is provided, was not previously employed by the employer,
      and did not have full-time employment for 30 or more days prior to
      being hired by the employer;
         2. The employer employs an average total number of full-time
      employees during the tax year for which the tax credit is provided
      which exceeds the average total number of full-time employees
      employed by the employer during the 12-month period immediately
      prior to April 1, 2021; and
         3. The employer submits an application for the tax credit in the
      manner required by the commissioner, the commissioner approves
      the application, and the employer provides, or makes available as
      requested by the commissioner, all information regarding the
      number, wages, and employer payroll taxes or any other
      information required by the commissioner.
         The bill sets the amount of the refundable tax credit provided to
      an approved employer for each eligible individual employed during
      a tax year as the total amount of the employer payroll taxes paid
      during that tax year by the employer with respect to that individual,
      subject to the requirements of the bill. Employer payroll taxes
      include the portion paid by employers of State unemployment,
      temporary disability, and workforce development and basic skills
                                 2

assessments, and federal Social Security, Medicare, and
unemployment taxes. The bill provides that the employer receives
the tax credit only for the number of eligible individuals employed
full-time during the tax year which does not exceed the net increase
in the number of full-time employees employed full-time during the
tax year compared with the average total number of full-time
employees employed by the employer during the 12-month period
immediately preceding April 1, 2021.
   An employer may apply for and qualify for a tax credit under the
bill with respect to tax years 2021, 2022, and 2023. If the
employer’s application is approved for any of those three years, the
employer may continue to receive the tax credit for any of the four
tax years following that tax year during which the employer meets
the requirements of the bill.
   Upon a finding by the commissioner of employer compliance
with the bill’s requirements, the commissioner is required to certify
to the Director of the Division of Taxation that the employer is
eligible for a tax credit under this bill, the amount of the tax credit,
and provide a copy of the certification to the employer.
    This bill was pre-filed for introduction in the 2020-2021 session
pending technical review. As reported, the bill includes the changes
required by technical review, which has been performed.
   As reported by the committee, Assembly Bill No. 1679 is
identical to Senate Bill No. 1958, which also was reported by the
committee.


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