Measure Encourages More R&D; Stimulates Economy
(TRENTON) — Legislation Assemblywoman Pamela Lampitt sponsored to remove restrictions on the amount of research and development spending businesses in New Jersey could claim against their corporate business taxes was signed into law Thursday.
“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.”
Previously, New Jersey businesses were only able to claim up to 50 percent of their total corporate tax liability in corporation business tax research expense credits and were not able to reduce their overall tax liability below the state’s statutory minimum level for corporate business taxes.
The new law (formerly A-4205) removes the 50 percent cap, allowing a business conducting R&D in New Jersey to claim up to 100 percent of its research costs in corporation business tax research expense credits, provided it does not reduce its 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.”