Assembly Commerce and Economic Development Committee Statement to Assembly, Nos. 3683 and 2152 (May 19, 2022)

Summary

An Assembly Commerce and Economic Development Committee statement to the Assembly Committee Substitute for Assembly, Nos. 3683 and 2152, State of New Jersey, dated May 19, 2022, reporting the substitute favorably. The statement says the substitute establishes the Supplemental Unemployment Compensation Fund and appropriates $375 million to it to reimburse federal loans made to the State UI fund. It also provides corporation business tax and gross income tax credits to small businesses to offset scheduled UI tax increases for Calendar Years 2023 and 2024, not refundable but may be carried forward for seven years. The substitute requires not less than 30 days of advance notice to each employer of changes in UI taxes.

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ASSEMBLY COMMERCE AND ECONOMIC DEVELOPMENT COMMITTEE

STATEMENT TO

ASSEMBLY COMMITTEE
SUBSTITUTE FOR

ASSEMBLY,
Nos. 3683 and 2152

STATE
OF NEW JERSEY

DATED: MAY 19,
2022

The Assembly Commerce and Economic Development
Committee reports favorably an Assembly Committee Substitute for Assembly Nos.
3683 and 2152.

This Assembly Committee Substitute reduces the burden
to employers of increased unemployment insurance (UI) taxes by:

1. Establishing the Supplemental Unemployment
Compensation Fund and appropriating $375 million to that fund for the purpose
of reimbursing federal loans made to the State UI fund, with the goal of
eliminating the State UI fund’s federal debt, avoiding federal charges for that
debt, and increasing more quickly the reserves in the State UI fund needed to
facilitate reductions in employer UI taxes;

2. Providing corporation business tax and gross
income tax credits to small businesses to help offset scheduled increases in UI
taxes. The bill adopts the U.S. Small Business Administration’s framework for
defining a small business based on the numbers of employees, revenues, or both,
in the industry of the business. The tax credits would be available for
taxable years and privilege periods beginning in Calendar Years 2023 and 2024,
and based on potential increases in employer UI taxes in FY 2023 and FY 2024.
The tax credits are not refundable, but may be carried forward for seven years.
Small business that use grants or other subsidies to offset increased UI taxes
are not eligible for the bill’s tax credits; and

3. Requiring not less than 30 days of advanced
notice to each employer of any changes in the employer’s UI taxes.

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