NJ Senate Democrats

06/02/2017 | Press release | Distributed by Public on 06/02/2017 08:44

Whelan Bill Providing Tax Credit Eligibility for Qualified Businesses Clears Committee

For Release: ImmediateFriday, June 2, 2017Contact: Press Office 609-847-3700

TRENTON- Yesterday the Senate Budget and Appropriations Committee approved legislation sponsored by Senator Jim Whelan that would permit qualified businesses to count certain New Jersey-based independent contractors as employees for the purpose of receiving Grow New Jersey tax credits.

The bill, S-3102, allows a business to include persons employed as independent contractors in engineering, software development, technology services, or advanced manufacturing supply chains as full-time employees under the criteria to receive tax credits for job creation and retention activity under the Grow New Jersey Assistance Program.

'This bill incentivizes companies to grow here in New Jersey and gives them the opportunity to employ more New Jerseyans in high-paying, skilled positions,' said Senator Jim Whelan (D-Atlantic). 'This grant program is vital to economic development in our state and allowing employers in the aerospace industry to utilize this program will help to keep and attract jobs in the region surrounding the FAA tech centers.'

Under the bill, a person working as an independent contractor is considered a full-time employee if the business demonstrates to the New Jersey Economic Development Authority that: 1) the person provides critical capabilities to the business in engineering, software development, technology services, or advanced manufacturing; 2) the person works for at least 35 hours a week, or renders any other standard service generally accepted by custom or practice as full-time employment, and the person is provided with employee health benefits under a health benefits plan authorized pursuant to state or federal law; and 3) those persons are to number 15 or greater in order to be counted at the rate of 80 percent towards the business's statewide workforce total.

The bill would require any business receiving tax credits for the contractors to annually provide the EDA with a report identifying the number of persons working as independent contractors for the business and their contractual or partnering relationship with the business.The aerospace industry uses local independent contractors because its small pool of both buyers and suppliers makes it prone to volatility. By rewarding the use of independent contractors, the state would incentivize aerospace companies to increase their presence in New Jersey and contract with local businesses.

Grow New Jersey is a tax incentive program for companies that create or retain jobs in New Jersey. Since the enactment of the N.J. Economic Opportunity Act of 2013, 233 active projects have been approved under the Grow NJ Program for a total award amount of more than $4.4 billion. According to the EDA, Grow NJ will support the creation of more than 29,400 estimated new jobs and the retention of more than 28,300 existing jobs at risk of leaving New Jersey.

The bill was approved by the Senate Budget and Appropriations Committee with a vote of 11-1. The bill next heads to the full Senate for further consideration.