New Jersey Direct Financial Incentives
New Jersey's economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment.
Corporate Taxes & Incentives Guide
Signed into law in Sept. 2013, the New Jersey Economic Opportunity Act of 2013 merges the State’s economic development incentive programs with the goal of enhancing business attraction, retention and job creation efforts and strengthening New Jersey’s competitive edge in the global economy. The Grow New Jersey Assistance Program (Grow NJ) is now the main job creation incentive program and the Economic Redevelopment and Growth Program (ERG) is the State’s key developer incentive program. EDA is no longer accepting applications for assistance under the Business Employment Incentive Program (BEIP), Business Retention and Relocation Assistance Grant Program (BRRAG), and Urban Transit Hub Tax Credit Program (UTHTC).
Grow NJ Assistance Program
Grow NJ is a powerful job creation and retention incentive program that strengthens New Jersey's competitive edge against tax incentive programs in surrounding states. Businesses that are creating or retaining jobs in New Jersey may be eligible for up to tax credits ranging from $500 to $5,000 per job, per year; with bonus credits ranging from $250 to $3,000 per job, per year (award amounts vary based on applicable criteria.) Please see www.NJEDA.com/GrowNJ for more information on program eligibility.
Economic Redevelopment and Growth (ERG) Program
The Economic Redevelopment and Growth (ERG) Program is an incentive for developers and businesses to address revenue gaps in development projects, defined as having insufficient revenues to support the project debt service under a standard financing scenario. It can also apply to projects that have a below market development margin or rate of return. The grant is not meant to be a substitute for conventional debt and equity financing, and applicants should generally have their primary debt financing in place before applying. In order for a project to be approved, it needs to undergo a rigorous analysis of the sources and uses of funds, construction costs and projected revenues. All of these metrics are compared to industry standard measures, many of which are available to view in the supporting documents available on the program’s webpage at www.njeda.com/ERG.
Angel Investor Tax Credit Program: All investors that invest in a qualifying New Jersey emerging technology business may benefit from a tax credit of 10% of the qualified investment made in a NJ emerging technology business, up to a maximum allowed credit of $500,000 for each qualified investment, through the Angel Investor Tax Credit Program. For more information, including eligibility criteria, please visit www.NJEDA.com/angeltaxcredit. Since the Angel Investor Tax Credit program launched in 2013, 210 investments have been approved, representing a total of more than $74 million of private investment in New Jersey-based companies.
Bond Financing: A creditworthy manufacturing company, a 501(c)(3) not-for-profit organization or an exempt facility in New Jersey can apply for long-term financing under the Bond Financing Program. $500,000 to $10 million in tax-exempt bonds for for-profit companies, with both a fixed or variable interest rate, and terms up to 20 years for real estate and 10 years for equipment. Or, $500,000 with no dollar limit in tax-exempt bonds for qualified not-for-profit organizations.
Tax-exempt bonds for eligible for-profit companies can be used to finance capital improvements and expansions, including real estate acquisitions, new equipment, machinery, building construction, and renovations. Tax-exempt bonds for not-for-profit organizations seeking capital to expand community services can be used to finance land and building acquisitions, new construction and renovations, equipment purchases, debt refinancing and working capital. Government tax-exempt bonds can be used for projects that are owned and operated for the benefit of local, county and state government bodies.
Direct Loans for Small To Mid-Sized Businesses
New Jersey businesses in need of financing and committed to job creation/retention may be eligible for up to $2 million in direct loans through the EDA when conventional financing is not available. Businesses must commit to the creation or retention of one full-time job for every $65,000 of EDA exposure within two years.
Edison Innovation Clean Energy Manufacturing Fund (CEMF): CEMF includes two separate program components offering up to $3.3 million as a grant and loan for New Jersey manufacturers of Class I renewable energy and energy efficiency technologies. Up to $300,000 is available as a grant to assist with the manufacturing site identification and procurement, design and permits. Up to $3 million is available as a loan to support site improvements, equipment purchases and facility construction and completion. One third of the loan may convert to a performance grant if certain business and technology-based milestones are met.
Edison Innovation Green Growth Fund (EIGGF)
Technology companies with Class I renewable energy or energy efficiency products or systems that have achieved “proof of concept” and successful independent beta results, have begun generating commercial revenues, and will receive 1:1 match funding by time of loan closing may be eligible for loans with a performance grant component under the Edison Innovation Green Growth Fund. Please visit www.NJEDA.com/EIGGF for more information.
Edison Innovation Fund
The Edison Innovation Fund is a suite of financing instruments designed to develop, sustain, and grow biotechnology and technology businesses in New Jersey. Through the Edison Innovation Angel Growth, VC Growth and Growth Stars funds, which are structured as subordinated convertible debt, early-stage companies are provided growth capital to directly fund uses such as hiring key staff, product marketing and sales. Since 2010, the State has closed on investments totaling over $23 million through the Edison Innovation Fund. Please visit www.njeda.com/tls for more information.
Energy Efficiency and Conservation Block Grants (EECBG)
The Energy Efficiency and Conservation Block Grant (EECBG) Rebate Program provides supplemental funding up to $20,000 for eligible New Jersey local government entities to lower the cost of installing energy conservation measures. Funding for the EECBG Rebate Program is provided through the American Recovery and Reinvestment Act (ARRA).
Energy Sales Tax Exemption for Certain Counties
Manufacturing businesses in Salem County may be eligible for energy sales tax exemption for the retail sale, transmission or distribution of electricity and natural gas.
Federal Historically Underutilized Business Zone (HUBZone) Empowerment Contracting Program
The HUBZone Empowerment Contracting Program provides federal contracting preferences to businesses that obtain HUBZone certification in part by employing staff who live in a HUBZone. The company must also maintain a "principal office" in one of these specially designated areas. New Jersey's HUBZones are located in over 60 cities and towns throughout 20 counties.
Foreign Trade Zones
Foreign Trade Zones allow companies to bring foreign goods or raw materials for manufacturing and/or assembling into the United States without formal customs entry or payment of customs duties and government excise taxes until products leave the zone. If the final product is exported from the United States, no U.S. customs duty or excise tax is levied. If the final product is entered into the commerce of the United States, fees are only due at the time of transfer on the product or its parts, whichever is lower. New Jersey has five foreign trade zones strategically located throughout the state: Morris County, Port Newark/Port Elizabeth Marine Terminal, South Jersey Port in Camden, Mercer County Airport and Lakewood Development Corporation.
Hazardous Discharge Site Remediation Fund (HDSRF)
Loans, grants and matching grants are available to public, private and not-for-profit entities for the investigation and/or remediation of known or suspected contaminated sites. Funding for this program is dependent upon availability.
International Trade Assistance
Whether you're a New Jersey company looking to do business globally or an international company interested in establishing a business in the state, there are a number of resources that are available to assist you. New Jersey can help your company access export and import consulting, identify buyers and new international markets for your products or services, find partners for joint ventures and strategic alliances and take advantage of financing opportunities and site selection services for companies seeking a presence in the state.
Literacy Skills Grants
The New Jersey Department of Labor & Workforce Development offers competitively awarded training funds to help businesses improve the basic skills of incumbent workers.
Local Government Energy Audit
Under this New Jersey Board of Public Utilities (BPU) program, participants select from a list of pre-qualified auditing firms who will follow the strict parameters of New Jersey's Clean Energy Program™ and deliver an investment-grade audit to identify cost-effective measures for saving energy. The program will subsidize 100 percent of the cost of the audit as long as recommended measures totaling at least 25 percent of the audit's costs are implemented. Eligible facilities include, but are not limited to, offices, courtrooms, town halls, police and fire stations, sanitation buildings, transportation structures, schools and community centers. All local governments, New Jersey state colleges or universities, and 501(c)(3) not-for-profit agencies located within the service territory of at least one of New Jersey's public utilities are eligible.
Manufacturing Equipment and Employment Investment Tax Credit Program
Investments in qualified manufacturing equipment may be eligible for the Manufacturing Equipment and Employment Investment Tax Credit. The program offers a tax credit for the tax year in which the investment was made based on the cost of the equipment, as well as each of the following two tax years based on the average increase in New Jersey employees.
Municipal Landfill Closure and Remediation Reimbursement Program
An eligible developer seeking financial assistance in the closure, remediation and redevelopment of municipal landfill sites in New Jersey may be eligible for reimbursement of 75 percent of the closure or cleanup costs.
New Jersey Advantage Program
Creditworthy New Jersey business in need of financing and committed to job creation/retention in New Jersey may be eligible for up to a $5 million TD Bank term loan with a partial, subordinate EDA guarantee of up to 50%, or up to a $5 million TD Bank line of credit with partial, subordinate EDA guarantee of up to 50%, through the New Jersey Advantage Program, a joint program of the EDA and TD Bank. The funding can be used for fixed assets, working capital or refinancing of existing debt, and the approval process involves both TD Bank and the EDA, as both organizations will work together in making a credit decision on each loan application.
New Jersey Business Growth Fund: Credit-worthy companies that are retaining or creating jobs in New Jersey may be eligible for up to a $3 million PNC Bank loan with a 25% or 50% New Jersey Economic Development Authority (EDA) guarantee. The funding can be used for machinery and equipment or real estate, with loan terms of up to five years for machinery and equipment and up to five years for owner-occupied real estate purchases. Companies must commit to creating or maintaining one full-time job in the State for every $50,000 of guarantee provided by the EDA, with the exception of manufacturers, which must commit to maintaining one full-time job per $50,000.
New Jersey Manufacturing Extension Program (NJMEP)
NJMEP assists manufacturing companies to become more productive, profitable and globally competitive. The program offers technical and management solutions to competitive problems and represents a valuable resource for manufacturing businesses.
New Jersey SmartStart Buildings® Program
The New Jersey SmartStart Buildings Program provides design support for large development projects (buildings over 50,000 square feet); technical assistance for smaller projects (buildings under 50,000 square feet); and financial incentives for the purchase and installation of energy efficiency measures. Eligible equipment includes heating and cooling systems such as electric chillers, gas cooling, electric unitary HVAC, ground source heat pumps and gas heating and water heating; lighting and lighting controls; motors and variable frequency drives; and a custom measures track that provides incentives for innovative measures that are proven to be cost-effective.
New Jobs Investment Tax Credit
The New Jobs Investment Tax Credit is available for taxpayers who invest in new or expanded business facilities that create new jobs in New Jersey. The investment must create at least five new jobs for small or mid-size businesses or 50 new jobs for larger business taxpayers, and must meet the median annual compensation requirement for the current tax year.
Pay for Performance
Pay for Performance is a New Jersey Board of Public Utilities (BPU) program directed at large facilities in a manner that directly links incentives to energy savings in a whole-building approach. The existing buildings component of the program is designed for commercial, industrial, and multifamily buildings with an annual peak demand in excess of 200 kW. The new construction component targets buildings with 50,000 square feet or more of planned space, as well as buildings undergoing substantial renovation. Pay for Performance relies on a network of Program Partners that provides technical services under direct contract to building owners. These Partners develop an Energy Reduction Plan for each project that includes technical components typically found in a traditional energy audit, a financial plan for funding the energy efficient measures and a construction schedule for installation. Three incentives are awarded as program milestones are completed with the first incentive paid at the completion of the Energy Reduction Plan, the second paid once all measures are installed, and the final incentive paid following a comprehensive verification report that proves the savings targets have been met or exceeded.
In addition, Pay for Performance projects that incorporate Combined Heat & Power (CHP) will be eligible for additional incentives up to $1 million. The annual CHP solicitation has been eliminated and customers are now able to apply for CHP incentives on a year-round basis (funding permitted). To qualify, the facility must be located in New Jersey, and the customer must purchase electricity from the utility grid. A minimum overall annual system efficiency rating of 60 percent, based on total energy input and total utilized energy output, must be met. Additional requirements are specified as part of the CHP Application Package within the Pay for Performance Program description.
New Jersey's Business Action Center can work as an extension of your team to help navigate the regulatory, permitting and compliance process inherent in relocation and expansion projects.
Petroleum Underground Storage Tank Program— Leaking Tanks Commercial and Residential
Grant and loan funding is available to business owners and residential property owners that must upgrade, close and remediate discharge from petroleum underground storage tanks. Applicants must have less than 10 tanks on site, and net worth must not exceed $2,000,000. Funding for this program is dependent on availability.
Petroleum Underground Storage Tank Program—Non-Leaking Tanks Commercial, Residential and Not-for-Profit
The Petroleum Underground Storage Tank Program provides grants to business owners and residential property owners who have less than 10 tanks on site and are required by law to upgrade, close and remediate discharge from those tanks. Funding for this program is dependent on availability.
The New Jersey Department of Labor and Workforce Development offers assistance recruiting qualified workers.
Premier Lender Program
The New Jersey Economic Development Authority (EDA) partners with banks to overcome the financial obstacles that can stall the growth and expansion of New Jersey-based businesses. EDA’s banking partners that have Premier Lender status can provide small businesses with low cost financing that includes EDA loan participation and/or guarantees. Businesses can use this financing for fixed assets, working capital to meet operating needs, and/or the refinancing of other bank debt. In partnership with EDA Premier Lender banks, EDA can provide participations/guarantees of up to 50% of the bank loan amount for fixed asset loans (maximum EDA participation of $2,000,000, maximum EDA guarantee of $1,500,000, total EDA exposure not to exceed $2,750,000) or up to 50% of the bank loan amount for working capital loans (maximum EDA participation of $750,000, maximum EDA guarantee of $1,500,000, total EDA exposure not to exceed $2,250,000.) Banks that have been approved by the EDA for Premier Lender status benefit from faster turnaround and reduced risk through EDA participation. Premier Lenders that submit requests for loan participations and/or guarantees from the EDA through the Premier Lender Program can expect: EDA approval or rejection applications in as early as three to five business days, a written commitment letter is issued within two days of approval, and upon notice, closing within three business days of receipt of commitment letter. Please visit www.NJEDA.com for program information as well as a list of Premier Lender banks.
Real Estate Impact Fund
For profit and non-profit developers and business entities with demonstrated experience in successfully completing real estate development projects may be eligible for financing of up to $3 million for costs associated with projects located within Targeted Areas. The goal of the fund is to support and foster redevelopment in strategic urban and other significant locations that would not otherwise occur in the near term and to strengthen existing and catalyze future development opportunities and private investment. The Impact Fund will advance economic development by supporting projects consistent with local redevelopment plans or strategies, attract private investment, and by creating or retaining jobs.
Registered Apprenticeship Incentive Program
Employers with up to 450 employees may be eligible for financial resources to upgrade the skills of employees working in the direct production of goods. One-time grants of up to $5,000 are available for each employee who completes 52 weeks of employment as an apprentice under the Registered Apprenticeship Incentive Program.
Renewable Energy Incentive Program (REIP)
Residents, local government officials, facility managers or developers building onsite renewable energy projects using solar, wind and bio-power technologies may be eligible for financial incentives and support services under the Renewable Energy Incentive Program. Incentives vary according to the type of project, type of building, type of equipment and other factors. Generally, residential, government and municipal solar photovoltaic projects up to 50 kW may be eligible for rebates up to $0.75/watt of capacity, up to 30 kW. Wind systems may be eligible for up to $3.20/kWh of capacity, and sustainable biomass systems may be eligible for up to $5/watt of capacity. REIP is part of New Jersey's Clean Energy Program™ administered by the New Jersey Board of Public Utilities (BPU).
Research and Development Tax Credit
Businesses claiming the federal research and development tax credit for a new or improved product, process or software program qualify for the state's Research and Development Tax Credit. The program provides a credit of 10 percent of the excess research expenses over a base year amount plus 10 percent of basic research payments, as taken under the federal tax credit. Unused credits may be sold under the Technology Business Tax Certificate Transfer Program.
Sales and Use Tax Exemption Program (STX): The Sales and Use Tax Exemption Program allows companies to make purchases for construction and renovation of their new business location without having to pay State sales tax. Eligible companies must have 1,000 or more employees in New Jersey and relocate 500 or more to a new business location. Life sciences, pharmaceutical and manufacturing companies may be eligible if they relocate 250 or more employees to a new research and development facility, a new headquarters or a new manufacturing facility.
Small Business Fund: The Small Business Fund provides expedited approvals of loans, loan participations and guarantees up to $300,000 to credit-worthy small, women- and minority-owned businesses that have been in operation for at least one year, as well as not-for-profit corporations that have been in operation for at least three years. These loans may be used for fixed assets or working capital.
Site Selection Services
New Jersey offers a full range of site selection tools including development services, land assemblage, structuring financing and facilitating the permitting process. This full-service approach provides considerable financing advantages for companies considering moving to or expanding in New Jersey.
Technology Business Tax Certificate Transfer Program
Qualified biotechnology and technology companies with fewer than 225 employees may be eligible to sell unused net operating losses and R&D tax credits to unrelated profitable corporations for at least 80% of their value, up to a maximum lifetime benefit of $15 million. For more information, including eligibility criteria, please visit www.NJEDA.com/NOL.
Urban Enterprise Zones (UEZ)
New Jersey's UEZ Program was created to foster an economic climate that revitalizes designated urban communities and stimulates their growth by encouraging businesses to develop and create private sector jobs through public and private investment. Participating businesses may be eligible for a variety of incentives. The program currently has over 30 zones located in over 35 municipalities throughout the state.
Urban Enterprise Zones (UEZ) Manufacturers Energy Sales Tax Exemption
Certified UEZ manufacturers with at least 250 full-time employees, 50 percent of whom are involved in the manufacturing process, may be eligible for an exemption from the sales and use tax on energy and utility services.
Urban Enterprise Zones (UEZ) Sales Tax Exemption on Purchases
Businesses located in a designated UEZ may be eligible for an exemption from sales tax on most purchases, with certain exceptions. The exemption applies to the full sales tax otherwise due on purchases of tangible personal property (except motor vehicles, parts or supplies), and most services (except telecommunications services). Businesses with total gross receipts of less than $10 million (for all locations, in and out of the zones) may be eligible for the exemption at time of purchase, while businesses with total gross receipts over $10 million (for all locations, in and out of the zones) will pay the prevailing sales tax at time of purchase and apply quarterly for a refund of sales taxes paid. A separate exemption, not guided by total gross receipts, applies to materials, supplies and services for the exclusive use in erecting structures or building on, or improving, altering or repairing, the real property of a qualified business located in the zone that are purchased for the benefit of the business property located in the zone, whether purchased by the qualified business or a contractor.
Urban Enterprise Zones (UEZ) Employment Tax Credit
UEZ-based businesses receive employment tax credits for hiring new, additional full-time employees. A credit of $1,500 is allowed for each new, additional full-time employee living in a UEZ municipality who immediately prior to employment by the taxpayer was unemployed for at least 90 days, or was dependent upon public assistance as the primary source of income. For new, additional full-time employees not qualifying for the $1,500 credit, a credit of $500 is allowed if the employee lives in a UEZ municipality and was not employed in the UEZ municipality immediately prior to being hired. Employees must be employed for at least six continuous months to earn the credit.
Urban Enterprise Zones (UEZ) Investment Tax Credit
Certified UEZ businesses that are not entitled to a UEZ Employee Tax Credit may be entitled to the UEZ Investment Tax Credit. This credit is available to non-retail and non-warehouse corporations with fewer than 50 employees. For employers with fewer than 10 employees, qualified investments must be at least $5,000. For employers with more than 10 employees, the minimum investment requirement of $5,000 increases by $500 per each additional employee beyond 10. The tax credit may be equal to up to 8 percent of the qualified investment.
Small Business Services:
Microlenders and Community Development Financial Institutions (CDFIs)
Through the Loans to Lenders component of the Fund for Community Economic Development, EDA makes capital available to financial intermediary organizations who can effectively reach small businesses in local markets, including micro-lenders and CDFIs. These organizations have the ability to offer term loans and lines of credit to micro-enterprises and small businesses not qualified for traditional bank financing.
Small businesses who are in need of a microloan are encouraged to click on the links below or navigation on the left to learn more about financing through these organizations.
UCEDC - a statewide, not-for-profit economic development corporation dedicated to assisting and financing small businesses and minority- and women-owned enterprises. Access to capital is often a small business owner’s greatest challenge and UCEDC offers a variety of financing options when conventional lending sources are not available. With loans ranging from $500 to $5 million, including microloans, SBA 7a, and SBA 504 loans, UCEDC will work with start-up and established businesses to find the right financing solution.
Cooperative Business Assistance Corporation (CBAC) - CBAC is a non-profit, public-private partnership created in 1987. Established to encourage the growth and stability of the small business sector, CBAC facilitates opportunities for banks to make business loans in the City of Camden, New Jersey, Philadelphia, Pennsylvania, and the six counties located in Southern New Jersey. CBAC offer loans to businesses for as little as $1,000 to as much as $2,000,000 through various loan and guaranty programs.
Greater Newark Enterprises Corporation (GNEC) - GNEC provides financial assistance and training to small businesses, businesses owned by women, low-income individuals, and minorities for the purpose of encouraging entrepreneurship.
New Jersey Community Capital (NJCC) - New Jersey Community Capital is a 501(c)(3) nonprofit CDFI that provides innovative financing and technical assistance to organizations that support housing and sustainable community development ventures that increase jobs, improve education and strengthen neighborhoods. NJCC offers loan capital that is broader than bank lending to results-oriented, socially responsible organizations that are committed to creating positive change in low-to-moderate income communities throughout New Jersey.
Technical Assistance Partners
In addition to the millions of dollars in funding EDA administers as loans and loan guarantees to New Jersey small businesses, EDA also partners with several organizations that provide a wide array of services to New Jersey small businesses and entrepreneurs.
Expert staff at these organizations provide support and guidance in a variety of areas including: technical assistance, mentoring/coaching, financing, government contracting assistance, technology commercialization and international trade facilitation. Our partners offer focused outreach to minority- and women-owned businesses and many of their programs are free of charge.
We encourage you to take advantage of these strategic EDA partnerships and explore how your business can benefit from their services. Click on the links below or in the navigation at the left to learn more.
UCEDC - UCEDC offers intensive six-week workshops throughout the year at various locations in New Jersey, with curriculum tailored specifically to start-ups or established businesses. Start-up entrepreneurs are guided through a personal business-readiness assessment and the basics of starting a business in New Jersey. Owners of established businesses are helped to challenge their status quo and bring their operations to the next level.
New Jersey Small Business Development Centers (NJSBDC) - The NJSBDC network, comprised of 11 centers across the state, provides comprehensive services and programs for small business in New Jersey. NJSBDC expert staff and practicing business consultants help established small business owners and aspiring entrepreneurs to develop business plans and marketing strategies, learn accounting and financial analysis, find capital financing, identify new markets, and expand their operations. NJSBDC provides one-to-one management consulting and counseling, training, loan packaging services and specialized assistance in procurement, technology commercialization, E-Business presence, and international trade.
Solar Renewable Energy Certificate (SREC) Registration Program (SRP)
The SRP is used to register the intent to install non-rebated solar projects in New Jersey. Owners of non-rebated solar projects must register their projects in the SRP prior to the start of construction in order to establish the project's eligibility to earn SRECs. Registration of the intent to participate in New Jersey's solar marketplace provides market participants with information about the pipeline of anticipated new solar capacity and insight into future SREC pricing. Each time a system generates 1,000 kWh of electricity, an SREC is earned and placed in the customer's electronic account. SRECs can then be sold on the SREC tracking system, providing revenue for the first 15 years of the system's life. Electricity suppliers, the primary purchasers of SRECs, are required to pay a Solar Alternative Compliance Payment (SACP) if they do not meet the requirements of New Jersey's solar renewable portfolio standard (RPS). One way they can meet their RPS requirement is by purchasing SRECs. As SRECs are traded in a competitive market, the price may vary significantly. The actual price of an SREC during a trading period can and will fluctuate depending on supply and demand.
New Jersey Department of Economic Development New Jersey Business Action Center
Trenton, NJ 08625-0820
866-534-7789 Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings. This information was last updated October 2015.
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