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

Summary

Statement of the Assembly Commerce and Economic Development Committee of the State of New Jersey, dated May 5, 2021, reporting Assembly Bill 1679 favorably. The bill establishes a New Jobs for New Jersey tax credit program giving employers of 100 or fewer full-time employees a refundable credit against the corporation business tax or the gross income tax for each eligible individual hired after April 1, 2021 who was not previously employed by the employer and lacked full-time work for 30 or more days. The credit equals the employer payroll taxes paid for that individual during the tax year, limited to the net increase in full-time employees over the prior 12 months. Employers may qualify for tax years 2021, 2022 and 2023 and continue for four following years, and the bill is identical to Senate Bill 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
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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