New Jersey Assembly Bill A636

New Jersey 2022-2023 Regular Session

• Introduced: 1/11/22
• Refer: 1/11/22

Caption

Provides corporation business tax credit for certain investment in manufacturing equipment and manufacturing facility renovation, modernization, and expansion, or hiring and training of new employees for manufacturing purposes.

Impact

The legislation provides a tax credit equivalent to 10% of qualifying expenditures made during specified privilege periods. This encompasses costs associated with installing new manufacturing equipment, conducting renovations, and employing new full-time workers who undergo qualified training. By establishing these incentives, the bill aims to attract both local and potentially out-of-state businesses to invest in New Jersey's manufacturing sector, thereby enhancing the state's economic landscape.

Summary

Bill A636 seeks to stimulate the manufacturing sector in New Jersey by introducing a corporation business tax credit. This credit is applicable for new investments in manufacturing equipment, as well as for the renovation, modernization, and expansion of existing manufacturing facilities located within designated 'Smart Growth Areas'. The bill intends to facilitate not only the physical enhancement of manufacturing capabilities but also the hiring and training of new employees, thus promoting job creation within the state.

Contention

While proponents of A636 argue that enhanced manufacturing investment will lead to significant economic growth and job creation, there is a potential concern regarding the efficient allocation of tax credits. Critics may express worry that the focus on Smart Growth Areas could neglect other regions that also require economic stimulus, particularly in rural or economically disadvantaged areas. Furthermore, the bill stipulates that expenditures eligible for a tax credit under A636 would not qualify for other existing tax credit programs, which may lead to discussions about the adequacy of this approach for fostering comprehensive economic development.