New Jersey Senate Bill S2659

New Jersey 2024-2025 Regular Session

• Introduced: 2/12/24
• Refer: 2/12/24

Caption

"Made in New Jersey Tax Credit Act"; provides CBT tax credits to taxpayers that purchase "New Jersey made" products.

Impact

If enacted, this legislation would significantly influence state laws related to corporate taxation and local economic practices. By encouraging the purchase of New Jersey-made products, the bill aims not only to promote local manufacturing but also to create jobs and support small businesses throughout the state. The legislation could change corporate behavior regarding sourcing and purchasing products, potentially increasing demand for local products and services while reducing reliance on out-of-state vendors. However, the effectiveness of this approach will depend on the ability of businesses to demonstrate compliance with the bill's criteria regarding product sourcing.

Summary

Senate Bill S2659, known as the 'Made in New Jersey Tax Credit Act', aims to bolster the local economy by providing tax credits under the corporation business tax to businesses that purchase New Jersey-made products. The bill offers a tax credit equivalent to 25% of the costs incurred by businesses when purchasing New Jersey-made products, which must consist of significant parts and labor sourced from within the state. This initiative is designed to incentivize local production and manufacturing, which proponents argue is essential for sustaining and enhancing New Jersey's economic landscape. Additionally, businesses can carry forward any unused credits for up to seven privilege periods, enhancing the bill's flexibility and economic utility for businesses engaged in the local supply chain.

Contention

Some points of contention surrounding S2659 may stem from differing opinions on the efficacy of tax credits as a means for improving the state's economy. Critics might argue that such incentives could disproportionately favor larger companies with the resources to capitalize on these tax credits, raising questions about equity and the impact on smaller entities. Furthermore, concerns may be raised regarding how the 'New Jersey-made' criteria are enforced and whether it may restrict businesses that struggle to localize production due to market constraints, potentially leading to unintended negative consequences.