Gibbons Law Alert

Gibbons Law Alert

Category: Business Incentives

Are New Jersey’s Business Loan, Incentive, and Grant Programs Right for You?

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Posted in Business Incentives / Economic Development

On October 26, 2016

Ronald Reagan famously said that the nine most terrifying words in the English language are, “I’m from the government and I’m here to help.” But for businesses starting up, expanding, or relocating into New Jersey, state government can be helpful, if you know where to start. We regularly counsel clients on government incentives, loans, and business assistance offered through the nationally-recognized New Jersey Economic Development Authority (NJEDA) and other State agencies. The NJEDA’s programs assist businesses of all sizes access loans/loan guarantees, as well as business and tax incentives. A few of the many programs offered are listed below. Loan Programs The NJEDA offers several loan programs that support small and mid-sized companies acquiring fixed assets, obtaining working capital, and refinancing debt: The Premier Lender Program provides loan and line of credit participations/guarantees in varying amounts. The NJEDA has a group of preferred lenders, and rates are generally at or below traditional loans. In return for the NJEDA’s assistance, the business has to agree to add one new full-time employee for every $65,000 of NJEDA exposure. The Small Business Fund provides up to $500,000 for small businesses, minority or woman owned businesses, and nonprofits that have been in business for at least one to three years. The Direct Loan Program provides up to $2 million...

Governor Christie Acts on BEIP Conversion Tax Credit Payment Changes

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Posted in Business Incentives

On July 1, 2016

On June 30, 2016, Governor Christie signed to law Senate Bill 2376/Assembly Bill 4002, which modifies the tax credit payment schedule for Business Employment Incentive Program (“BEIP”) Grant recipients converting their cash grants to tax credits. The Legislature and Governor enacted a law in January allowing businesses to convert outstanding BEIP Grants into tax credits. The law provided that BEIP Grants accrued but not paid during years 2008-2013 were to be redeemable as tax credits over a five-year period starting in the 2017 tax accounting or privilege period of the business. S-2376/A-4002 revises the tax payment credit schedule so that only 5 percent of the tax credit is redeemable in 2017. Twenty percent would be redeemable in 2018, with 25 percent redeemable in years 2019, 2020, and 2021. The change was required due to the projected budgetary shortfall in Fiscal Year 2017, which the State Treasurer announced on May 18, 2016. If your business is still considering a BEIP conversion, the deadline to opt-in is the close of business on July 11, 2016. Gibbons can assist your company with the process of evaluating and implementing a conversion.

BEIP Conversion Update: State Treasurer Recommends Amending Law

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Posted in Business Incentives

On May 23, 2016

With projected revenues for State Fiscal Year (“SFY”) 2017 decreasing, on May 18, 2016, the NJ State Treasurer recommended that the Legislature amend the Business Employment Incentive Program (“BEIP”) conversion law (P.L.2015, c.194) to reduce the percentage of BEIP tax credits redeemable in SFY 2017 from thirty (30) percent to five (5) percent. In testimony before the Assembly and Senate Budget Committees, the Treasurer stated that any legislation implementing his recommendation should not change (1) the conversion election deadline of July 11, 2016; (2) the total number of years for the tax credits to be issued; or (3) the overall amounts convertible to tax credits. The only change sought by the Treasurer’s Office is to shift a greater percentage of BEIP tax credit redemptions to SFY 2018 through SFY 2021. If your business is a BEIP Grant recipient and you have questions regarding the BEIP conversion process, please contact a member of the Gibbons Government & Regulatory Affairs Department. We will continue to monitor the BEIP conversion program and any action to amend the existing law.

Clock Starts on BEIP Grant Conversion Program

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Posted in Business Incentives

On May 18, 2016

Hundreds of New Jersey Business Employment Incentive Program (“BEIP”) Grant recipients may be eligible to convert their BEIP Grant to a refundable tax credit under Senate Bill 3232/Assembly Bill 4834 (S-3232/A-4834), which the State Legislature approved on December 17, 2015 and Governor Christie signed into law on January 11, 2016. If your business is a BEIP Grant recipient, Gibbons can assist you with the process of evaluating and implementing a BEIP conversion. Since the enactment of BEIP in 1996, New Jersey has entered into 499 BEIP agreements with businesses creating approximately 110,000 jobs and resulting in $12 billion in total economic activity. In 2013, the New Jersey Legislature enacted the “Economic Opportunity Act of 2013” which sunset BEIP and created the Grow New Jersey Assistance Program. The State has subsequently not fully funded BEIP Grant payments in the annual State budget. S-3232/A-4834 allows a business that is eligible to receive a BEIP Grant to direct the New Jersey Economic Development Authority (“NJEDA”) to convert its BEIP Grant to a refundable tax credit that would not be subject to the annual appropriations process. These tax credits may be applied against the business’ corporate tax liability, insurance premium tax liability, or foreign insurance tax liability. A business without these tax liabilities can apply for a tax credit...

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