On January 11, 2016, Governor Christie signed the bipartisan P.L. 2015, c. 194 into law, permitting the voluntary conversion of outstanding BEIP grant commitments into refundable tax credits. Under the law, a business approved for a BEIP grant that chooses to pursue this opportunity had 180 days following enactment (by July 11, 2016) to direct the NJEDA to convert the grant to a refundable tax credit. The law included a structure that manages the fiscal impact on the State in any one year, while also allowing for the issuance of tax credits to those companies that have been awaiting grant payments the longest. Credits will be made available for use beginning in Fiscal Year 2017.
Click here to read the statute
In accordance with the New Jersey Economic Opportunity Act of 2013 and effective September 18, 2013, the NJEDA is no longer accepting applications for assistance under the Business Employment Incentive Program (BEIP). Per the Act, all pending applications submitted for approval under this programs will be acted on by December 31, 2013.
IF YOU ARE: An economically viable expanding or relocating business that creates jobs in New Jersey.
An economically viable expanding or relocating business that creates jobs in New Jersey.
YOU CAN ELECT: To secure annual incentive grants via the Business Employment Incentive Program (BEIP).
IN THE AMOUNT OF: Up to 80% of the total amount of employees’ state income taxes withheld by the company during the calendar year from the new employees hired, awarded for up to 10 years, to a maximum of $50,000 per employee over the course of the grant.
BENEFITS: BEIP is a powerful incentive for encouraging businesses to locate and expand in New Jersey. Approved businesses receive annual cash grants based on the number of new jobs they have created in the State of New Jersey.
In order to qualify for a BEIP grant, businesses must create at least 25 new jobs within a 2-year period; emerging high technology and biotech companies’ eligibility threshold is 10 new jobs. A business must also demonstrate that the BEIP grant is a “material” factor in moving the job expansion or relocation forward in New Jersey, and that it is economically viable.
The standard BEIP incentive is limited at 50% of the employees’ state income taxes withheld on the newly created jobs; however, companies that meet certain Smart Growth objectives can have their grant boosted to 80%. Qualifying businesses may be eligible for up to 10 years worth of grants, though they must maintain the project and the jobs in New Jersey for at least 1.5 times the number of years the grant is in effect. Greater consideration is given to positions that average 1.5 times the minimum wage during the grant agreement.
Application fee: $1,000
Commitment fee: $1,000
Closing fee: $1,000
Extension fee: $750
Servicing fee: equal to 2% of annual grant disbursement with no floor and a cap of $75,000
Post Benefit Servicing fee: 20% of the final disbursement (refunded at end of reporting requirement if all post award reporting is done pursuant to grant agreement, with NJEDA retaining 1% per year for servicing)
- Administrative Fees:
- Grants ranging from $35,000 to $1 million over 10 years = $1,000
- Grants ranging from $1 million to $5 million over 10 years = $2,500
- Grants over $5 million over 10 years = $5,000
- Major Modification Fees**:
- Grants ranging from $35,000 to $1 million over 10 years = $2,500
- Grants ranging from $1 million to $5 million over 10 years = $7,500
- Grants over $5 million over 10 years = $25,000
Division of Taxation Tax Clearance Certificate Application Processing Fee: $75 for standard processing; $200 for expedited processing (response within three business days)
* All fees are non-refundable.
** Major modification fees will be charged in conjunction with complex changes to grants that require extensive staff time to review and complete. Examples include: mergers, acquisitions, spin-offs, separations, resets of employment numbers, cap waivers, restructures and settlements. Complex or multi-tier requests warrant redrafting of documents, board action, legal review, etc. as determined by Authority.
Division of Taxation Tax Clearance Certificate required.
Certificates may be requested through the State of New Jersey’s Premier Business Services (PBS) portal online.
Under the Tax & Revenue Center, select Tax Services, then select Business Incentive Tax Clearance.
If the applicant’s account is in compliance with its tax obligations and no liabilities exist, the Business Incentive Tax Clearance can be printed directly through PBS.
Please note: It is the applicant/client’s responsibility to maintain a current and clear tax clearance certificate. If a current and clear certificate is not evidenced to NJEDA at time of closing, NJEDA will not proceed with closing.