(TRENTON) – Legislation sponsored by Assembly Democrats Ruben J. Ramos Jr. and Jason O’Donnell to create jobs and economic development by providing tax credits to small and medium-sized businesses that embark on or expand export activities was advanced Thursday by an Assembly committee.
The Export Promotion Tax Credit Act (A-4172) establishes corporation business tax and gross income tax credits for those small and medium-sized businesses that embark on or expand their export activities.
“With an unimpressive economic recovery being projected to continue in New Jersey, it’s important to find new and innovative ways to create jobs and economic growth, and this bill does exactly that,” said Ramos (D-Hudson). “These tax credits would encourage New Jersey businesses to open new doors and earn revenue by promoting their goods and services to residents of foreign countries. We now live in a global economy, and we want New Jersey to compete.”
“Now is exactly the right time for us to think boldly and help incentivize New Jersey based businesses to grow and project themselves beyond our borders,” said O’Donnell (D-Hudson). “Export-led growth of New Jersey businesses would create jobs in New Jersey while enhancing income, wealth and tax receipts in our state. We would also help narrow the nation’s gaping trade deficit with the rest of the world. This is a great strategy for these difficult economic times. It is always the right time for our government to help create jobs for our citizens.”
Under the bill, a first tax credit is available for small and medium-sized businesses that had no export-related receipts in the three tax years ending with the tax year in which the legislation is enacted.
For the first, second, and third tax years following enactment, the tax credit for that kind of business will be 10 percent of the business’ export receipts, but not more than 100 percent of business’ export promotion expenses for the first year, 66 2/3 percent for the second year, and 33 1/3 percent for the third year.
For the fourth, fifth, and sixth tax year following enactment, the tax credit will equal 10 percent of the inflation-adjusted increase in businesses’ export promotion expenses.
A second tax credit is available for small and medium-sized businesses that had export-related receipts in the three tax years ending with the year of enactment. For the three tax years following enactment, the tax credit for that kind of business will equal 10 percent of the inflation-adjusted increase in the businesses’ export promotion expenses.
The bill was released by the Assembly Commerce and Economic Development Committee.
