Assembly Commerce and Economic Development Committee Statement to Senate, No. 1958 (May 5, 2021)

Summary

An Assembly Commerce and Economic Development Committee statement to the Senate on Senate Bill No. 1958, State of New Jersey, dated May 5, 2021, reporting the bill favorably. The bill establishes a New Jobs for New Jersey tax credit program, administered by the Commissioner of Labor and Workforce Development, for employers of 100 or fewer full-time employees who hire unemployed workers after April 1, 2021 and increase their average full-time workforce. The refundable credit equals the employer payroll taxes paid for each eligible individual, capped at the net increase in full-time employees. Employers may qualify for tax years 2021, 2022 and 2023, and the statement says the bill is identical to Assembly Bill No. 1679.

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ASSEMBLY COMMERCE AND ECONOMIC DEVELOPMENT COMMITTEE

STATEMENT TO

SENATE, No.
1958

STATE
OF NEW JERSEY

DATED: MAY 5,
2021

The Assembly Commerce and Economic Development Committee
reports favorably Senate Bill No. 1958.

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 the 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 receive the tax credit
for the number of eligible individuals newly-hired during the tax year, but not
exceeding the net increase in the number of full-time employees employed during
the tax year compared with the average total number employed 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.

As
reported by the committee, Senate Bill No. 1958 is identical to Assembly Bill
No. 1679, which also was reported by the committee.

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