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Offshore Wind Tax Credit Program

The Offshore Wind Tax Credit is a powerful financial tool designed to spur private capital investment and employment growth in major, land-based offshore wind industry projects.  The tax credit program provides reimbursement for capital investments in industry-specific facilities located in the seven southern counties of New Jersey.


If You Are:


A company making a capital investment in an offshore-wind related facility of $50M ($17.5M if a tenant) in the seven southern counties of New Jersey and will be employing at least 300 new, full-time employees at that facility. 

 

You Can Apply For:


Tax credits equal up to 100% of the qualified capital investments made, except as limited by a 110% net positive
economic benefit to the State. 

Total credits approved under this program are capped at $100 million.

Taxpayers may apply 10% of the total credit amount per year over a ten year period against their corporate business tax or insurance premiums, or sell the tax credit certificate for an amount not less than 75% of the credit amount.  

 

Eligibility Requirements:


Capital Investment Requirements:

Site developers or owners: Must make a minimum $50 million capital investment in a qualified wind energy facility located in wind energy zones (i.e., property located in the South Jersey Port District established pursuant to The South Jersey Port District Corporation Act, P.L. 1968, c.60 (N.J.S.A. 12:I IA-I et seq.).  

Tenants: Must occupy space in a qualified business facility located in wind energy zone. The tenant-occupied space must represent at least $17.5 million of the capital investment in the facility. 

 

New Full-Time Employee Requirements:

In addition to making the required capital investment, at least 300 employees must work full-time at the qualified wind energy facility.

The calculation of new full-time employees may include positions resulting from supply coordination agreements with equipment manufacturers, suppliers, installers and operators associated with the supply chain required to support the qualified wind energy facility.  All supply chain jobs must also be new jobs (above a baseline set before the first-year supplier agreement with the applicant). These positions will be counted on a cumulative hour/full time equivalent basis.

All jobs can only be counted if the job-holder spends at least 80% of their time in NJ.  
 
Please note the tax credits may be reduced or forfeited if facility or employment levels are not maintained for the required term.

Net Postiive Benefits Test:

Tax credit awards will be subject to a net positive economic benefits test.  This means that a project must demonstrate that as a result of the capital investment and the resultant job creation, the State of New Jersey will receive (through sales, payroll, property, and other taxes) at least 110 percent of the total tax credit amount over a 10-year period.
 
For the Offshore Wind Tax Credit Program, the net positive benefits test considers direct and indirect benefits to the State during construction and direct benefits after construction.

Applicants may request an extended net-benefit period (up to 20 years) if there is verifiable evidence of a longer company commitment to the state (i.e., a lease for 20+ years).
 

Fees:


Application Fee: $5,000 

Approval Fee: 0.5% of the approved amount with a $500,000 cap, payable prior to execution of the non-binding letter of intent 

Issuance Fee: 0.5% of tax credit amount with a $500,000 cap, paid prior to the receipt of the tax credit certificate.

Servicing Fee: 2% of annual amount with an annual cap of $75,000.

Tax Credit Transfer Fee: $5,000 first request; $2,500 for each additional request made annually.

Minor Modification Fee:
 
  • $5,000 ($5 million total tax credit or less);
  • $10,000 (all others)

Major Modification Fee:
 
  • $7,500 ($5 million total tax credit or less);
  • $25,000 (all others)

Extension Fee:
 
  • $5,000 (first 6 months);
  • $10,000 (second 6 months)

Full amount of direct costs of any analysis by a third party retained by the EDA

 

Application & More Information:


Businesses must apply for the tax credits by July 1, 2024, and satisfy the capital investment and employment conditions for award of the credits by July 1, 2027.

The application for the Offshore Wind Tax Credit Program will be available shortly.  For any questions related to the program, please contact Maciek Bury, NJEDA Project Officer, at mbury@njeda.com.

Courtesy Copy - Special Adopted New Rules: N.J.A.C. 19:31-20 - Offshore Wind Tax Credit Program