ASSEMBLY COMMERCE AND MILITARY AND VETERANS' AFFAIRS COMMITTEE
STATEMENT TO
ASSEMBLY, No. 2414
with committee amendments
STATE OF NEW JERSEY
DATED: MAY 12, 1997
The Assembly Commerce and Military and Veterans' Affairs Committee reports favorably and with committee amendments Assembly Bill No. 2414.
As amended, this bill makes special provisions under the new jobs investment tax credit to allow enhanced corporation business tax credits for research and development investment and job creation. This bill increases the amount of research and development investment costs that are eligible for the credit. It also doubles the credit's value for research and development from a maximum of 10 percent of the investment's cost to 20 percent.
Currently, the amount of credit depends on the amount of qualified investment and the number of new jobs created, but may not exceed 10 percent. The cost of constructing or expanding facilities is discounted depending on the useful life of the property, and qualified investment may be less than 100 percent of cost. Under this bill, the entire cost of property is considered a qualified investment, provided that the property is used for research and development.
The current credit also depends on the number of new jobs created by the new investment. Small business taxpayers may receive a credit of one half of one percent of the qualified investment for every 5 jobs created up to a 10 percent credit for 100 new jobs created; larger businesses receive the same credit for every 50 new jobs up to a maximum of 1000 new jobs. Under this bill, any taxpayer that creates new research and development jobs can receive a credit of one percent of the qualified investment for every 5 new jobs, up to a 20 percent credit for 100 new jobs created, without regard to the size of the taxpayer.
This bill creates a new measure for determining the new jobs investment tax credit that applies only to investment in facilities used for research and development purposes and the creation of jobs performing, supervising or supporting research and development functions. Investment to create jobs that does not meet the special research and development criteria will qualify for the existing credit.