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 stipulates that qualified research expenses must include expenditures for research conducted within the state and allows for contributions to energy research consortia to qualify as basic research payments.

Moreover, the bill introduces a provision that makes the research tax credit refundable for privilege periods starting on or after the date of enactment, a change from the current law where the credit is non-refundable. Taxpayers will have the option to either receive a cash refund for any unused portion of the credit or carry it forward for up to seven privilege periods. This flexibility aims to provide greater financial relief and encourage investment in research and development within New Jersey. The bill is set to take effect immediately upon enactment and will apply to privilege periods beginning thereafter.

Statutes affected:
Introduced: 54:10A-5.24