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OFFSHORE WIND TAX CREDIT- ERA UPDATE


Please be advised that legislation was recently enacted that will impact the Offshore Wind Tax Credit Program. NJEDA is currently in the process of reviewing the legislation, and may need to make changes to the program rules, requirements, application, or other materials to incorporate the legislative changes. To access a courtesy copy of the legislation, please click here.

The Offshore Wind Tax Credit Program provides a reimbursement for capital investment in a qualified wind energy facility located in New Jersey. The program is designed to spur employment growth and offshore wind supply chain development as a result of capital investment in land-based offshore wind industry projects. 

The NJEDA Board has approved the updated rules for the Offshore Wind Tax Credit Program and the updated program is now active. Please see the updated product card at www.njeda.com/offshorewindtaxcredit

ELIGIBILITY

In order to receive tax credits through the Offshore Wind Tax Credit Program, a site developer or owner must:

  • Must make or acquire capital investments totaling at least $50 million in a qualified wind energy facility. 
  • Meet new, full-time employee requirements.
  • Employ residents of New Jersey or of a state that has entered into a reciprocity agreement with the State of New Jersey.

The calculation of new full-time employees may include select 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.

Tenants seeking tax credits through the program must:

  • Occupy a leased area of a qualified wind energy facility.
  • Occupy a space that represents at least a $17.5 million capital investment in the facility.  

All Applicants must:

  • Demonstrate that the award of the tax credit is a “material factor” in their decision to create or retain at least the minimum number of full-time jobs.

AWARD SIZE

Tax credits awarded through the Offshore Wind Tax Credit Program will be awarded over four awards, over four privilege periods – taxable years in which the business meets the requirements for the minimum number of new, full-time employees.

FISCAL AND RESIDENT PROTECTIONS

In order to receive tax credits through the Offshore Wind Tax Credit Program, a project must be in good standing with the NJ Department of Labor, NJ Department of Treasury, and the NJ Department of Environmental Protection. The Project must also meet minimum environmental standards and pay family-sustaining wages to construction workers and building service workers.

Tax credits awarded through the program will be subject to a net positive benefits test. This test considers direct and indirect benefits to the State during construction and direct benefits after construction is complete.

The full statutory text of the program can be found in section 109 of the Economic Recovery Act of 2020.

Full-time employee requirements:

  • First award: cumulative 100 new, full-time employees compared to the number of full-time employees at the time of application. 
  • Second award: cumulative 150 new, full-time employees compared to the number of full-time employees at the time of application. 
  • Third award: cumulative 200 new, full-time employees compared to the number of full-time employees at the time of application.
  • Fourth award: cumulative 300 new, full-time employees compared to the number of full-time employees at the time of application. 

 

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