TRENTON, N.J. – New Jersey’s corporate business tax has led to an exodus of investment in the state once called the nation’s medicine chest. New Jersey is fifth out of seven states in the region for innovation, according to an NJBIA study, and experienced the largest loss of undergraduate students by more than 21,000.
Though New Jersey has not been a research and development leader during the Covid-19 pandemic, Assemblyman Christopher DePhillips is leading the way for the state to regain its place as an innovation leader.
“This is a simple bill that would incentivize businesses in multiple industries to conduct their research and development in New Jersey,” said DePhillips (R-Bergen). “Our state was once the undisputed leader of innovation. Taxes and regulations led to our demise, and reducing them will amplify the attractiveness of New Jersey’s educated workforce.”
The bill (A5406) increases the tax credit for research expenses to 15 percent from 10 percent. It will apply to businesses conducting research in transportation and logistics, manufacturing, aviation, electric vehicles and clean energy, life sciences, hemp processing, information and technology services, finance and insurance, food and beverage, professional services and other innovative industries determined by the state Economic Development Authority.
“Everything we can do to bring jobs, especially high-paying jobs, back to New Jersey must be considered. If the corporation business tax won’t be decreased, we need to guarantee that businesses will gain something from conducting research and development in New Jersey,” concluded DePhillips.
The bill allows the credit to be refundable for the first time. Businesses would get the full value of the credit even if their expenses were less than estimated.