New Jersey Senate Bill S1641

New Jersey 2022-2023 Regular Session

• Introduced: 2/14/22
• Refer: 2/14/22

Caption

"Innovate New Jersey Act"; establishes tax-free business incubators at institutions of higher education.

Impact

The proposed bill aims to amend current state taxation laws by exempting new businesses within these tax-free areas from various taxes, including the corporate business tax and local property tax. By facilitating easier market entry for start-ups in educational settings, the bill encourages job creation within these regions. State authorities will monitor the program's effectiveness through annual reports documenting business performance and job numbers, thereby connecting economic development goals with higher education institutions.

Summary

Bill S1641, known as the Innovate New Jersey Act, establishes the Innovate New Jersey Program aimed at revitalizing local economies by transforming underutilized space at public and private colleges, universities, and community colleges into designated tax-free areas for business incubators. These incubators provide a supportive environment for new and expanding businesses, allowing them to operate without local property taxes for five years and sales taxes for ten years. The program intends to foster innovation and economic growth by leveraging the resources and infrastructure of educational institutions.

Contention

Despite its potential benefits, the Innovate New Jersey Act has faced criticism regarding its eligibility criteria and potential implications for existing businesses. Critics raise concerns over the types of businesses that may apply for tax exemptions, notably excluding many service-oriented sectors such as retail and hospitality. Additionally, there is apprehension that focusing on these incubators may detract resources from traditional business sectors or lead to inequities in educational funding from reallocating prime campus space away from academic programs.