Daniel J. Munoz//March 13, 2020//
Daniel J. Munoz//March 13, 2020//
The New Jersey Economic Development Authority is waiving compliance rules for some of its largest tax incentive programs – such as the Grow New Jersey tax breaks – in the midst of COVID-19’s spread across New Jersey and the nation.
Many of the state’s incentive programs require workers spend at least “80 percent of his or her time ” at the office the award is being used to finance in order to qualify as a regular, full-time employee under the eyes of the law. Tax break agreements call for the creation of a certain number of jobs, and if a company does not show in its annual reports to the EDA that all those jobs were created, the award could be reduced.
The EDA is scaling back that rule, at least temporarily, as many workers – and employers – turn to to telecommuting and adopt “social distancing,” which health officials contend could help snuff out the coronavirus by halting its spread.
In addition to Grow NJ, under which the state awarded more than $4.5 billion when it was active between 2013 and 2019, the new waiver applies to companies taking part in the Business Employment Incentive Program, under which the state awarded $1.52 billion; the Business Retention and Relocation Assistance Program, under which the state awarded $125 million; and the Urban Transit Hub Tax Credit Program, under which the state awarded more than $1 billion.
Instead of the 80 percent rule, companies will have to show that an employee does at least 35 hours of work a week – or 30 hours in Atlantic City, Camden, Trenton, Passaic and Paterson – and has state income tax taken out of their paycheck.
“As companies across the state formulate plans to continue conducting business while mitigating the potential risk of COVID-19, this waiver will alleviate concern about jeopardizing incentives for which they have been approved,” Tim Sullivan, chief executive officer of the EDA, said in a Thursday statement.
New Jersey residents have been increasingly advised to stay at home and avoid large events and crowded places, in order to mitigate the transmission of COVID-19. Many schools, and the state’s major universities, have closed or transitioned to online classes.
Conferences up and down the state have been cancelled, as have many St. Patrick’s Day parades. On Thursday, Gov. Phil Murphy released a statement recommending people avoid events with more than 250 attendees, and that such events be cancelled, including “concerts, sporting events, and parades.”
“[P]ractice commonsense hygiene, like washing hands routinely, staying home if you do not feel well, and keeping a six-foot distance from others,” Murphy said in a statement Thursday. “[S]ocial distancing works. It is our best chance to ‘flatten the curve’ and mitigate the chance of rapid spread, so we can respond to this public health emergency in an even more focused manner.”