Provides temporary corporation business tax and gross income tax credits for insourcing business to New Jersey.
The bill is structured to apply for taxable periods starting from January 1, 2019, through to January 1, 2024, allowing businesses to claim credits if they increase their full-time employee count in New Jersey as a result of the insourcing. It mandates that any relocation must follow a written plan, and credit status will be contingent upon maintaining or increasing employment in the state. Failure to do so can lead to recapture of credits previously awarded, emphasizing that sustained job creation is a key performance metric within this initiative.
Senate Bill 1357, introduced in the New Jersey legislature, aims to provide temporary corporation business tax and gross income tax credits for businesses that insource operations back to New Jersey. Specifically, the bill is designed to incentivize companies to relocate business functions that they previously operated outside the state or country by offering tax credits that equal 35 percent of insourcing expenses associated with shutting down a unit abroad and 25 percent for those located out of state. The intention is to counteract decades of outsourcing trends stemming from lower tax rates and labor costs in other regions.
In summary, S1357 not only seeks to reshape corporate behavior by fostering insourcing practices but also reflects ongoing legislative efforts to revitalize the New Jersey economy in a pro-business manner. The outcome of this bill could set a precedent on how state policies might evolve to address the challenges posed by global outsourcing, balancing incentives against local employment needs.
Discussions surrounding S1357 have raised points of contention around the efficacy and potential unintended consequences of the proposed tax incentives. Critics raise concerns that while the bill aims to bolster local employment, it may inadvertently encourage manipulation of employment numbers for the sake of receiving tax breaks. Furthermore, there are apprehensions regarding the sustainability of these jobs post-incentive period and whether the state's economy truly benefits from such temporary financial assists. Proponents, however, argue that the measure could significantly revive sectors in New Jersey by bringing jobs back and enhancing the local labor market.