N.J. Admin. Code § 19:31U-1.14

Current through Register Vol. 56, No. 12, June 17, 2024

Section 19:31U-1.14 - Reduction and forfeiture of tax credits

(a) If, in any tax period, an eligible business reduces the total number of full-time employees in its Statewide workforce by more than 20 percent from the number of full-time employees in its Statewide workforce in the last tax period prior to the credit amount approval under the program, then the eligible business shall forfeit its credit amount for that tax period and each subsequent tax period, until the first tax period for which documentation demonstrating the restoration of the eligible business's Statewide workforce to the threshold levels required by this subsection has been reviewed and approved by the Authority, for which tax period and each subsequent tax period the full amount of the credit shall be allowed.

(b) Except for a small business, if the annual report filed by an eligible business pursuant to section 77 at P.L. 2020, c. 156, and N.J.A.C. 19:31U-1.10(a) provides that the number of new full-time employees employed by the eligible business subject to the project agreement or the salaries of the new full-time employees, as measured by the median salary, was reduced by more than 10 percent of the number of new full-time employees, or salaries thereof, in the annual report of the prior year, or the project agreement if the annual report is the first such report filed, then the Authority may reevaluate the net positive economic benefit of the project and reduce the size of the award accordingly. This reduction shall not affect any recapture pursuant to (f) below.

(c) If, in any tax period, the amount of withholdings paid to New Jersey or full-time employees employed by the eligible business subject to the project agreement or the salaries thereof, drops below 80 percent of the withholdings and number of new and retained full-time jobs, and the salaries thereof, specified in the project agreement or the project phase agreement, then the eligible business shall forfeit its tax credit amount for that tax period and each subsequent tax period, until the first tax period for which documentation demonstrating the restoration of the amount of withholdings paid to New Jersey or number of full-time employees employed by the eligible business subject to the project agreement to 80 percent of the withholdings and number of jobs specified in the project agreement or project phase agreement or the restoration of 80 percent of the salaries specified in the project agreement is reviewed and approved by the Authority.

(d) If the business is not in compliance with the community benefits agreement pursuant to N.J.A.C. 19:31U-1.9(c), the Authority shall reduce the size of the award by the amount equal to 120 percent of the monetary value of the contribution or contributions for which the business in not in compliance. This reduction shall not affect any recapture pursuant to (f) below.

(e) If at any time during the eligibility period, the Authority determines that the eligible business made a material misrepresentation on the eligible business's application, the eligible business shall forfeit all tax credits awarded under the program, which shall be in addition to any other remedies in the commitment agreement and any criminal or civil penalties to which the business and the officer may be subject.

(f) The Authority may recapture all, or part of, a tax credit awarded if an eligible business does not remain in compliance with the requirements of a project agreement for the duration of the commitment period. A recapture pursuant to this subsection may include interest on the recapture amount, at a rate equal to the statutory rate for corporate business or insurance premiums tax deficiencies, plus any statutory penalties, and all costs incurred by the Authority and the Division of Taxation in the Department of the Treasury in connection with the pursuit of the recapture, including, but not limited to, counsel fees, court costs, and other costs of collection. Failure of the eligible business to meet any program criteria shall constitute a default and shall result in the recapture of all or part of the tax credit awarded.

(g) With the exception of N.J.A.C. 19:31U-1.12(d), if all or part of a tax credit sold or assigned pursuant to section 78 at P.L. 2020, c. 156, and N.J.A.C. 19:31U-1.12 is subject to recapture, then the Authority shall pursue recapture from the eligible business and not from the purchaser or assignee of the tax credit transfer certificate.

(h) Any funds, net of costs incurred by the Authority, recaptured pursuant to this section, including penalties and interest, shall be deposited into the General Fund of the State.

N.J. Admin. Code § 19:31U-1.14

Amended by R.2022 d.058, effective 5/16/2022.
See: 54 N.J.R. 124(a), 54 N.J.R. 909(b).
In (b), substituted "subject to the project agreement" for "at, or associated with, the qualified business facility," and "project" for "commitment" preceding "agreement"; rewrote (c); and in (h), inserted ", net of costs incurred by the Authority,".

Recodified from 19:31-22.14 56 N.J.R. 807(a), effective 5/6/2024