This bill proposes significant enhancements to the research tax credit available to corporation business taxpayers in New Jersey, particularly those engaged in targeted industries. It increases the qualified research expenses tax credit from 10 percent to 15 percent for taxpayers primarily involved in specific sectors identified by the New Jersey Economic Development Authority, which includes industries such as advanced transportation, clean energy, and life sciences. Additionally, the basic research payments tax credit is raised from 10 percent to 15 percent for all taxpayers. The bill also clarifies that qualified research expenses must be incurred within the state and allows for contributions to energy research consortia to qualify as basic research payments.

Moreover, the bill introduces a provision that allows the research tax credit to be refundable, enabling taxpayers to receive cash payments for any unused credit rather than just carrying it forward for future tax periods. This change marks a significant shift from current law, which does not permit refunds for the research tax credit. The bill aims to incentivize research and development activities in New Jersey by making the tax credits more accessible and beneficial for businesses engaged in innovative and disruptive industries.

Statutes affected:
Introduced: 54:10A-5.24