New Jersey Senate Bill S1374

New Jersey 2024-2025 Regular Session

• Introduced: 1/9/24
• Refer: 1/9/24

Caption

Provides CBT and gross income tax credits for replacement of abandoned commercial building with new commercial building.

Impact

The bill is positioned to impact two significant areas – the economic landscape by facilitating the development of commercial sites, and the agricultural aspect by restricting construction on farmland. Given the misconception that constructing new buildings might reduce the amount of necessary farmland, the bill emphasizes that the new constructions should replace existing commercial sites rather than encroach upon agricultural lands, thereby aligning with environmental conservation goals. This regulatory balance aims to foster a sustainable economic environment without displacing essential agricultural operations.

Summary

Senate Bill S1374 proposes a tax credit under both the corporation business tax and the gross income tax for taxpayers who demolish abandoned commercial buildings and construct new commercial buildings in the same locations. The bill allows for a tax credit amounting to the lesser of 25% of the total costs incurred or $500,000. This tax relief aims to incentivize the reconstruction of commercial spaces that are currently derelict, thus promoting economic revitalization in specific areas of New Jersey where such buildings exist.

Contention

There may be contention among stakeholders about the effectiveness of these tax incentives, particularly concerning whether they are sufficient to stimulate actual construction or merely shift focus from one location to another without genuine economic improvement. Concerns might also arise regarding the cap of $5 million on the total credits available, which could limit the bill’s potential benefits to larger commercial developers while leaving smaller businesses at a disadvantage. Moreover, local governments might debate whether these types of incentives truly facilitate community development or risk furthering urban sprawl by promoting new builds in areas without adequate infrastructure.