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Five Myths about The Grow NJ Assistance Program

 

 

 

  • You cannot use the capital allocation method in a lease scenario.
  • The New Jersey Economic Development Authority (EDA)’s Grow NJ tax credits provide incentives for businesses to bring jobs to Camden, or keep them there. If you’re leasing space, you can apply for credits either based on the number of jobs you will have in Camden for 15 years, or the total capital outlay made to provide and fit out your space.

 

 

The program ended this year with the change in administration.                                   
Grow NJ is a program of the State of New Jersey and so is not affected by federal elections. Although New Jersey will have a new governor in 2018, this is not currently expected to impact the GROW NJ credits. By current law applications for these credits may be submitted/approved up to June 2019, after which a company would have up to three years to occupy their property. It is always possible, however, that the NJ Legislature will amend this law to allow for less, or more, time for these credits.

 

  • The tax credits are in cash.
  • The awards aren’t cash; they’re credits against New Jersey state income taxes. 10% of the credits are awarded each year for the first 10 years of occupancy.

 

  • Grow NJ only works for large companies, not those who don’t have enough NJ State tax to use the credits.
  • Most companies with more than 35 employees are eligible for the tax credits. Targeted industries with as few as 10 employees are also eligible, as are nonprofits, and many companies currently located in Camden. If you don’t have sufficient New Jersey tax obligations, you can readily sell them for cash.

 

  • The tax credits aren’t subject to federal tax.
  • In general, the incentives are subject to federal tax. Some companies treat them as capital gains (20% tax) by delaying their sale, and some treat them as ordinary income at their company’s tax rate. Non-profits are not taxed.

 

For more information on Grow NJ, click here or call Cooper’s Ferry Partnership, Camden’s private non-profit economic development group, at (856) 757-9154