This bill, titled the "End Data Center Tax Credits Act," aims to restructure how New Jersey distributes tax credits for economic development and energy projects. It establishes a new nine-year spending cap of $11.5 billion for various incentive programs, which limits the total amount of money available annually for initiatives like historic preservation, brownfields redevelopment, and manufacturing. To support energy goals, the legislation authorizes the Board of Public Utilities to issue tax credits specifically for energy storage projects and creates a temporary income tax credit for certain residential utility customers. Additionally, it sets specific annual and total dollar limits for existing programs such as the Next New Jersey Program and the Innovation Evergreen Act, while reserving $2.5 billion for transformative projects under the Aspire Program.
This bill modifies New Jersey's gross income tax by restricting the alternative business calculation adjustment for taxpayers with higher incomes. It allows business owners to net losses from specific income categories, such as rents or royalties, against gains to determine their taxable business income. Under the new rules, effective for tax years starting in 2026, taxpayers earning $500,000 or less can still deduct 50% of their business profit increase, while those earning between $500,000 and $1 million can only deduct 25%. The bill completely eliminates this tax deduction for individuals with gross income exceeding $1 million.
This bill limits the amount of net operating loss deductions that corporations in New Jersey can claim under the corporation business tax to a maximum of $1 million per tax period. It applies to privilege periods ending between July 31, 2026, and July 31, 2030, affecting approximately 600 taxpayers. If a company cannot use its full deduction due to this cap, the unused portion can be carried forward for an additional six tax periods or used to reduce taxable income by up to 75% in later periods ending between 2030 and 2032. The legislation also waives interest and penalties on estimated tax payments made between late 2025 and early 2027 that result from these new limits.
This bill imposes a temporary limit of $1 million on the amount of net operating loss deductions that corporations can claim under New Jersey's corporation business tax. It directly affects businesses with privilege periods ending between July 31, 2026, and July 31, 2030, restricting how much they can use past losses to lower their current taxable income. For periods ending between 2030 and 2032, any disallowed deductions may be used to reduce income by no more than 75 percent, and unused amounts can be carried forward for an additional six years. The legislation also waives interest and penalties on estimated tax payments made during a specific window if those underpayments result from the new deduction limits.
This New Jersey bill introduces a new fee for employers who have at least 50 employees receiving Medicaid health coverage. The fee amount varies based on company size, charging $325, $525, or $725 per covered employee and their dependents depending on whether the employer has between 50-249, 250-499, or 500 or more Medicaid recipients. Employers with employees who have developmental, intellectual, or permanent physical disabilities are exempt from paying this charge. The revenue generated from these fees is intended to help cover the costs of the State Medicaid program.
This bill eliminates a transaction-based requirement for remote sellers and corporations to pay New Jersey sales/use tax and corporate business tax. Currently, sellers must collect tax if they make 200+ separate transactions in New Jersey or exceed $100,000 in revenue. The bill removes the 200-transaction threshold, meaning only the $100,000 revenue rule remains to determine tax obligations. It directly affects out-of-state online retailers and corporations operating in New Jersey without a physical presence. The change applies only to future transactions, not retroactively.
