(TRENTON) – Legislation Assemblywoman Pamela Lampitt sponsored that would remove restrictions on the amount of research and development spending businesses in New Jersey could claim against their corporate business taxes unanimously passed the Assembly Wednesday.
The Senate is expected to give final legislative approval to the measure later today. If approved, the bill would head to the governor’s desk for his action.
“Research and development is an expensive investment for most businesses to make, especially when it doesn’t pay off with a viable new product,” said Lampitt (D-Camden). “Allowing New Jersey businesses to apply the money they spend doing R&D in the state against their corporate tax liability without restriction removes some of that risk and will hopefully encourage more R&D investment in our economy.”
Currently, New Jersey businesses can only claim up to 50 percent of their total corporate tax liability in corporation business tax research expense credits and may not reduce their overall tax liability below the state’s statutory minimum level for corporate business taxes.
Lampitt’s bill (A-4205) would remove the 50 percent cap, allowing businesses conducting R&D in New Jersey to claim up to 100 percent of their research costs in corporation business tax research expense credits, provided it does not reduce their overall tax liability below the state’s statutory minimum level.
“Encouraging companies to invest more in R&D through an unrestricted tax credit will benefit the state in several ways,” said Lampitt. “It will stimulate our economy and encourage economic growth. It will create new science and technology jobs, putting people back to work and reducing our state’s brain drain. And it will help give New Jersey businesses a competitive advantage over businesses in neighboring states.”