TRENTON, N.J. – Assemblyman Christopher DePhillips’ bill supporting research and development innovation with more attractive tax credits received a boost from New Jersey’s business community Monday.
The New Jersey Business & Industry Association came out in support of the assemblyman’s bill (S2702/A2487) that would increase the qualified research expenses tax credit from 10% to 15% for targeted businesses. Those businesses include advanced transportation and logistics, manufacturing, aviation, autonomous vehicle and zero-emission vehicle research or development, clean energy, life sciences, hemp processing, information and high technology, finance and insurance, professional services, film and digital media, non-retail food and beverage businesses. The bill was crafted around recommendations made by NJBIA’s Indicators of Innovation reports from 2020 and 2022.
“In an independent study, New Jersey has ranked dead last in business tax climate for the last seven years. If we are serious about making the state more attractive and competitive for innovative businesses, we must make changes that align with or surpass what other states are doing,” DePhillips (R-Bergen) said. “Making it easier for businesses to invest in new technologies can only lead to economic growth and strength for our state and for our families.”
Businesses take risks with research and development, with the understanding that risk may not result in a usable idea or product. Offering R&D tax credits incentivizes C and S corporations to make innovation investments. Currently, New Jersey law provides a tax credit of 10% of the excess of qualified research expenses over the base amount, or 10% of the basic research payments. Unused credits can be carried forward up to seven years. DePhillips’ bill not only increases that to 15%, but allows the total credit to be refundable.
“New Jersey has the location, the schools and education, and a highly skilled workforce to make it the envy of not only the Northeast but the country, if only we would create a tax and business climate to follow,” DePhillips added.