Month: September 2024

On Wednesday September 11th, the New Jersey Economic Development Authority (“NJEDA”) held its monthly Board meeting in Newark, NJ. At this meeting, the Board approved its 20th Aspire Tax Credit Program (“Aspire”) project as well as its second Historic Property Reinvestment Program (“HPRP”) project.

The NJEDA Board awarded $11,500,000 in Aspire tax credits in connection with a 43-unit residential development in Somers Point, NJ. The development encompasses two three-story buildings, and will also be financed by tax credits from the New Jersey Housing and Mortgage Finance Agency.

The NJEDA Board approved a Historic Property Reinvestment Program project for $8,000,000 in tax credits for the renovation of the Schwehm Building in downtown Atlantic City, NJ. When complete, this 8-story former office building will include 56 residential units and commercial spaces. The NJEDA is currently accepting applications for this round of tax credits, which will remain open until October 29th 2024.

Aspire Program

To date, the NJEDA has awarded over $2,000,000,000 in tax credits to 20 development projects in municipalities across New Jersey, including Woodbridge, Morristown, Newark, Hoboken, Union City, Bayonne, Trenton, and Camden. The program has been used to finance several large-scale projects, including the following:

• 386-unit mixed-use project in Hoboken, NJ.
• 58-acre, 1,567,385 square feet film studio in Bayonne, NJ.
• 101-unit senior affordable housing development in Union City, NJ.
• $356,000,000 mixed-use development in Newark, NJ, including 350 residential units, a new 53,000 square foot arts-education and community facility, 12,600 square feet of commercial space, and improvements to a 100,000 square foot performing arts center.

The Aspire Tax Credit Program provides tax credits covering between 50-80% of eligible project costs (not to exceed between $60M-$120M) for qualifying projects in eligible locations. Aspire can be used for both residential and commercial developments, and for projects as small as 25,000 – 50,000 square feet for commercial and $5,000,000 – $17,500,000 for residential, depending on location.

Historic Property Reinvestment Program

The HPRP is a competitive $50,000,000 annual gap financing tax credit that supports the development of eligible historic properties in qualifying locations in New Jersey. It can be combined with the Federal Historic Tax Credit and covers between 45-60% of eligible costs (not to exceed between $4M-$12M).

The program has approved over $50,000,000 in tax credits for two projects, including the Loews Theater in Jersey City. The NJEDA is currently accepting applications for this round of tax credits, which will remain open until October 29th 2024.

For more information, please contact:

Brendan Pytka
Director of Tax Credits & Incentives
Phone: (862) 418-3702
Email: bpytka@murphyllp.com

Chris J. Murphy
Partner, Chair of Tax Credits & Incentives Practice
Phone: (973) 723-7036
Email: cmurphy@murphyllp.com

In late July, Governor Phil Murphy signed A4558/S342, officially establishing the Next New Jersey Program (Next NJ), aimed at spurring large-scale investment from AI and AI-related industries, including the AI data center industry, in the State of New Jersey. Under Next NJ, businesses would be eligible for tax credits following the submission (and approval) of an application to the New Jersey Economic Development Authority (NJEDA).

To be eligible under the Next NJ program, eligible businesses must meet certain capital investment and employment thresholds, including the following:

• A minimum capital investment of $100,000,000 at the project location.
• The creation of at least 100 new full-time jobs.

Under the Next NJ program, the amount of tax credits allowed for a particular project would equal the lesser of:

1. The product of 0.1 percent of the eligible business’s total capital investment multiplied by the number of new full-time jobs;
2. 25 percent of the eligible business’s total capital investment; or
3. $250 million.

While the program will not be the right fit for every business seeking to investment capital into AI infrastructure in the State of New Jersey, it will be helpful for large-scale AI-related projects, including major data center developments throughout New Jersey.

For more information, please contact:

Chris J. Murphy
Partner, Chair of Tax Credits & Incentives Practice
Phone: (973) 723-7036
Email: cmurphy@murphyllp.com

Brendan Pytka
Director of Tax Credits & Incentives
Phone: (862) 418-3702
Email: bpytka@murphyllp.com

On January 1, 2024, the Corporate Transparency Act (CTA) officially took effect. Pursuant to the CTA, most companies are now required to disclose beneficial ownership information for any person or entity owning a 25% or more direct or indirect interest in a company (a “Beneficial Owner”), as well as information identifying all executive decision makers and/or those parties having substantial control over the company, to the Financial Crimes Enforcement Network (FinCen) of the United States Department of Treasury. Reporting is done through FinCen’s secure website, https://boiefiling.fincen.gov/boir.

Companies required to comply with the CTA include limited liability companies, corporations, limited partnerships and limited liability partnerships and other entities formed by filing with the Secretary of State, State Treasurer or other registrars of business entities in the jurisdiction of formation.

Certain companies are exempt from reporting requirements, such as banks, credit unions, insurance companies, public utilities, most non-profit corporations, public companies and large operating companies (companies employing 20 or more full time employees, having a physical office located in the United States and having filed a U.S. federal tax return reporting more than $5,000,000 in gross receipts or sales).

Each company that is required to report to FinCen (a “Reporting Company”) must disclose its full legal name (including any trade names or “doing business as” names), business address, employer identification number and jurisdiction of formation. Each Beneficial Owner, as well as the party submitting the report on behalf of a Reporting Company (an “Applicant”), must provide its full legal name, home address, date of birth and the issuing jurisdiction and identification number of a current U.S. passport, military identification card or driver’s license, along with a copy of such identification (“BOI Information”). Individuals desiring privacy, and those individuals who hold beneficial ownership interests in multiple entities, may obtain a FinCen Identifier, which may be reported in lieu of providing personal BOI Information.

Reporting Companies formed prior to 2024 have until December 31, 2024 to comply with the CTA. For all Reporting Companies formed during 2024, filings are required to be submitted within ninety (90) days from the date of filing of its organizational document or charter. In 2025, newly formed Reporting Companies will have only thirty (30) days to file their reports with FinCen.

The December 31, 2024 deadline is fast approaching. Starting in 2025, FinCen will increase enforcement of penalties for failure to comply, including civil penalties of up to $500 for each day a violation remains uncured, criminal fines of up to $10,000 and/or possible imprisonment not to exceed two years.

For more information, or if you require assistance determining whether you are required to comply with the CTA, please contact Charlie Wilkes at (973) 705-7422 (email: cwilkes@murphyllp.com) or Holly Burke at (973) 315-5577 (email: hburke@murphyllp.com).