N.J. Admin. Code § 19:31O-1.2
The following words and terms, when used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise.
"Act" means the Business Retention and Relocation Assistance Act, P.L. 2004, c. 65.
"Agreement" or "project approval agreement" means the project approval agreement between a business and the Authority governing the terms and conditions of the project approval for the sales tax exemption program. The Agreement describes the project, the date the commitment duration shall commence, the extent of sales tax exemption, the conditions and limitations of the sales tax exemption, the representations and reporting obligations of the business, and other such provisions which further the purposes of P.L. 2004, c. 65, §§19 through 22 (34:1B-185 through 188).
"Application" means the application submitted by a business for the sales tax exemption program, pursuant to P.L. 2004, c. 65 §§19 through 22.
"Approved site" means the site of the project in the New Jersey Development and Redevelopment Plan designated Planning Area 1 or 2 locations; however, if the site of the project is not located in either of such Planning Areas, the project involves renovation or expansion of an existing facility, and the project satisfies all other criteria of the program, as determined by the Secretary, the site may also be an approved site.
"Authority" means the New Jersey Economic Development Authority established under section 4 of P.L. 1974, c. 80 (34:1B-4).
"Board" means the Board of the New Jersey Economic Development Authority.
"Business" means an employer located in this State that has operated continuously in the State, in whole or in part, in its current form or as a predecessor entity for at least 10 years prior to filing an application to the program and which is subject to the provisions of 43:21-1 et seq. and may include a sole proprietorship, a partnership, or a corporation that has made an election under Subchapter S of Chapter One of Subtitle A of the Internal Revenue Code of 1986, or any other business entity through which income flows as a distributive share to its owners, limited liability company, nonprofit corporation, or any other form of business organization located either within or outside the State, such as a group of organizations under common control as defined in Section 414(b) or (c) of the Internal Revenue Code of 1986 and Federal Treasury regulations thereunder. For purposes of identifying full-time employees in eligible positions and retained State tax revenue, any such employees hired by or taxes paid by a professional employer organization (PEO) with which the business has entered into an employee leasing agreement shall be allocable to the business.
"BEIP grant" means the grant made to a business by the New Jersey Economic Development Authority pursuant to the provisions of P.L. 1996, c. 26 (34:1B-124 et al).
"Capital investment" means expenses that the business incurs following its submission of an application to the Authority pursuant to section 21 of P.L. 2004, c. 65 (34:1B-186 ) for:
1. The site preparation and construction, renovation, improvement, equipping of or obtaining and installing fixtures and machinery, apparatus or equipment, in a newly constructed, renovated or improved building, structure, facility or improvement to real property in this State; and
2. Obtaining and installing fixtures and machinery, apparatus or equipment in a building, structure or facility in this State.
Provided however that "capital investment" shall not include soft costs, such as financing and design, furniture, or decorative items, such as artwork or plants or office equipment, if the office equipment is property with a recovery period of less than five years. The recovery period of any property, for purposes of this definition, shall be determined as of the date such property is first placed in service or use in this State by the business, determined in accordance with section 168 of the Federal Internal Revenue Code of 1986 (26 U.S.C. § 168). For the purposes of this definition, cubicles and cubicles that include office equipment shall constitute capital investment. If the business is a tenant, expenses incurred on behalf of the tenant by the landlord and financed through the lease shall constitute capital investment expenses incurred by the tenant provided that the capital investment shall relate solely to the tenant's leasehold space and not the common areas of the building and shall be supported by the documentation referenced in N.J.A.C. 19:31O-1.5(a)2xiii and 1.7(a).
"Chief Executive Officer" means the Chief Executive Officer of the New Jersey Economic Development Authority.
"Commitment duration" means five years from the later of the relocation of all of the retained full-time jobs included in the project, which shall not be more than one year from the issuance of a temporary certificate of occupancy, or the completion date specified in the project approval agreement entered into pursuant to sections 19 through 22 of P.L. 2004, c. 65 (34:1B-185 through 188).
"Completion date" generally means the earlier of the date of the issuance of a temporary certificate of occupancy with respect to an approved site or in cases where no temporary certificate of occupancy is issued, one year from the project commencement date, as specifically set forth in the project approval agreement.
"Construction contract" means for purposes of undertaking the project, any contract for the acquisition, construction, improvement or installation of those portions of the project subject to sales tax or installation of eligible property. For purposes of this definition, the term "installation" means installation by a contractor, which involves access to pipes or wires within walls or any other alteration or modification of the project, but shall not include the delivery, locating, relocating, moving, assembling or setting up or eligible property by the provider of such property or the business's employees or any installation of such eligible property (including, but not limited to, machinery, apparatus and equipment) if such installation is made pursuant to a purchase contract by the provider of such property.
"Director" means the Director of the Division of Taxation in the Department of the Treasury.
"Eligible affiliate" means any person with respect to which the business:
1. Possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities, by contract or otherwise; and
2. Owns, either directly or indirectly, at least 51 percent of the voting stock or other equity or ownership interest of such person.
"Eligible property" means machinery, equipment, furniture and furnishings, fixtures, and building materials, but "eligible property" shall not include "motor vehicles" as defined pursuant to section 2 of P.L. 1966, c.30 (54:32B-2), parts with a useful life of one year or less, or tools or supplies used in connection with the eligible property. Eligible property does not include machinery or equipment purchased, rented or leased by a project participant construction manager, contractor, or subcontractor under contract with the business for their own use on the project.
"Full-time employee" means a person who is employed for consideration for at least 35 hours a week, or who renders any other standard of service generally accepted by custom or practice as full-time employment, as determined by the Authority, or a person who is employed by a professional employer organization pursuant to an employee leasing agreement between the business and the professional employer organization, in accordance with P.L. 2001, c. 260 (34:8-67 et seq.) for at least 35 hours a week, or who renders any other standard of service generally accepted by custom or practice as full-time employment, as determined by the Authority. "Full-time employee" shall not include any person who works as an independent contractor or on a consulting basis for the business. "Full-time employee" shall not include a child, grandchild, parent or spouse of an individual who has direct or indirect ownership of at least five percent of the profits, capital, or value of the business.
"Headquarters" means the single location that serves as the national administrative center of a business or the worldwide administrative center of a key division of the business, at which the primary office of the chief executive officer or chief operating officer of the business or the key division of the business, as well as the offices of the management officials responsible for key businesswide functions such as finance, legal, marketing, and human resources, are located.
"Life sciences business" means a business engaged principally in the production of medical equipment, ophthalmic goods, medical or dental instruments, diagnostic substances, biopharmaceutical products; or physical and biological research; or biotechnology.
"Manufacturing facility" means a business location at which more than 50 percent of the business personal property that is housed in the facility is eligible for the sales tax exemption pursuant to subsection a. of section 25 of P.L. 1980, c.105 (54:32B-8.1 3) for machinery, apparatus or equipment used in the production of tangible personal property.
"New business location" means the premises that the business has either purchased or built or for which the business has entered into a purchase agreement or a written lease for a period of no less than eight years from the date of relocation. A new business location may also include the premises from which the business moves on a temporary basis due to the rehabilitation of permanent premises that also qualifies as reconstruction as "reconstruction" is defined in the Uniform Construction Code, 5:23-6.3.
"Program" means the sales and use tax exemption program established under the jurisdiction of the Commission and administered by the Secretary, pursuant to P.L. 2004, c. 65 §§19 through 22 and this subchapter.
"Project" means the construction, renovation or expansion of facilities at the approved site as described in the project description in the application and the agreement that will become the business's new business location and that will be related to retained full-time jobs. The eligible scope of the project shall accommodate no more than 20 percent above the number of retained full-time jobs. In the event that the new business location will be at more than one location, the business may evidence that the application is for a single project through factors showing interrelatedness, such as the same business event driving the relocation, moves timed together, and full-time jobs relocated from the same business location.
"Project participant" means an eligible affiliate of the business or any construction manager, contractor or subcontractor that performs acquisition, construction, equipping, installation or improvements for the project and any other entities working on the project that use the sales tax certificate.
"Research and development facility" means a business location at which more than 50 percent of the business personal property that is purchased for the facility is eligible for the sales tax exemption pursuant to section 26 of P.L. 1980, c.105 (54:32B-8.1 4) for property used in research and development.
"Retained full-time jobs" means an eligible position that currently exists in New Jersey and is filled by a full-time employee but which, because of a relocation by the business, is at risk of being lost to another state or country. For the purposes of determining a number of retained full-time jobs, the eligible positions of the members of a "controlled group of corporations" as defined pursuant to section 1563 of the Federal Internal Revenue Code of 1986, 26 U.S.C. § 1563, shall be considered the eligible positions of a single employer. A retained full-time job is one that will not be included in the calculation of a BEIP grant subsequent to being moved to the approved project site.
"Sales tax certificate" means the sales and use tax exemption certificate issued by the Director to the business upon approval by the Secretary of the terms and conditions of the agreement.
"Sales tax exemption" means the sales and use tax exemption approved under an agreement pursuant to the Act, and for purposes of this program, the sales tax exemption shall be administered pro rata to reflect the eligible scope of the project, based on the number of retained full-time jobs increased no more than 20 percent (eligible scope) relative to the sum of the number of all of the jobs of all employers located at an approved project site during the commitment duration period.
"Sales tax recapture amount" means either:
1. If the event of recapture occurs during the commitment duration, provided the reduction of retained full-time jobs in the aggregate from execution of the project approval agreement until the event of recapture does not exceed 20 percent of the number of the retained full-time jobs: the sum of 1i, ii and iii below. To the extent the reduction of retained full-time jobs in the aggregate exceeds 20 percent of the number of retained full-time jobs, penalties pursuant to the State Uniform Tax Procedure Law, 54:49-1 et seq., may also be imposed.
i. A portion of the amount of the sales and use taxes, which would have been payable on all eligible property purchased for the project if the property was not purchased with the sales tax certificate based upon the proportionate value of such amount that corresponds to the reduction of retained full-time jobs and the period of noncompliance;
ii. Interest on the amount referred to in 1i above at the rate equal to the statutory rate for sales tax deficiencies; and
iii. All costs incurred by the Chief Executive Officer and the Division of Taxation in connection with the pursuit of the sales tax recapture amount (including, but not limited to, counsel fees, court costs and other costs of collection);
2. If the event of recapture occurs prior to the commitment duration, provided the reduction of retained full-time jobs in the aggregate from execution of the project approval agreement until the event of recapture does not exceed 20 percent of the number of retained full-time jobs: the sum of 2i, ii and iii below. To the extent the reduction of retained full-time jobs in the aggregate exceeds 20 percent of the number of retained full-time jobs, penalties pursuant to the State Uniform Tax Procedure Law, 54:49-1 et seq., may also be imposed.
i. A portion of the amount of the sales and use taxes, which would have been payable on all eligible property purchased for the project if the property was not purchased with the sales tax certificate based upon the proportionate value of such amount that corresponds to the reduction of retained full-time jobs and the failure to comply for any portion of the commitment duration;
ii. Interest on the amount referred to in 2i above at the rate equal to the statutory rate for sales tax deficiencies; and
iii. All costs incurred by the Chief Executive Officer and the Division of Taxation in connection with the pursuit of the sales tax recapture amount (including, but not limited to, counsel fees, court costs and other costs of collection); or
3. If the event of recapture, pursuant to N.J.A.C. 19:31O-1.12(a)3, occurs during or prior to the commitment duration: the sum of paragraphs 3i, ii, and iii below and penalties pursuant to the State Uniform Tax Procedure Law, N.J.S.A. 54:49-1 et seq., may also be imposed.
i. Repayment of the amount of the sales and use taxes, which would have been payable on the property purchased for the project if the property was not purchased with the sales tax certificate that is no longer eligible as a result of the calculation at N.J.A.C. 19:31O-1.12(a)3;
ii. Interest on the amount referred to in 3i above at the rate equal to the statutory rate for sales tax deficiencies; and
iii. All costs incurred by the Chief Executive Officer and the Division of Taxation in connection with the pursuit of the sales tax recapture amount (including, but not limited to, counsel fees, court costs and other costs of collection).
"Sales tax repayment amount" means the sum of:
1. The amount of sales and use taxes which would have been payable on all eligible property purchased for the project if the property was not purchased with the sales tax certificate; provided that if repayment is the result of a default of the agreement during the commitment duration, this amount shall be reduced by an amount allocable to the proportionate amount of the sales and use tax that corresponds to the period of time in which the business was in compliance measured from the completion date until the date of default;
2. Interest on the repayment amount referred to in paragraph 1 above at the rate equal to the statutory rate for sales tax deficiencies plus any penalties pursuant to the State Uniform Tax Procedure Law, 54:49-1 et seq.; and
3. All costs incurred by the Chief Executive Officer and the Division of Taxation in connection with the pursuit of the sales tax repayment amount (including, but not limited to, counsel fees, court costs and other costs of collection).
N.J. Admin. Code § 19:31O-1.2
See: 37 N.J.R. 3024(a), 38 N.J.R. 2165(b).
In definition "Business", in the first sentence substituted "Subchapter S of Chapter One" for "subchapter S of chapter one", inserted "of" preceding "1986" and substituted "either within or outside" for "within" and added the second sentence; and added the final sentence to definition "Project".
Amended by R.2006 d.322, effective 9/5/2006.
See: 37 N.J.R. 4176(a), 38 N.J.R. 3618(a).
In definition "Full-time employee", deleted "whose wages are subject to withholding as provided in the New Jersey Gross Income Tax Act, N.J.S.A. 54A:1-1 et seq.," following "full-time employment,".
Amended by R.2008 d.38, effective 2/19/2008.
See: 39 N.J.R. 3278(a), 40 N.J.R. 885(a).
In definition "Commitment duration", inserted "the later of the relocation of all of the retained full-time jobs included in the project, which shall not be more than one year from the issuance of a temporary certificate of occupancy, or"; in definition "Project", substituted "and that will be related to retained full-time jobs. The eligible scope of the project shall accommodate no more than 20 percent above the number of retained full-time jobs." for the period following the first occurrence of "location"; in definition "Sales tax exemption", inserted "to reflect the eligible scope of the project,", "increased no more than 20 percent (eligible scope)", "sum of the" and "of all employers" and substituted "all of the" for "total"; added definition "Sales tax recapture amount"; and in definition "Sales tax repayment amount", substituted "penalties pursuant to the State Uniform Tax Procedure Law, N.J.S.A. 54:49-1 et seq." for "statutory penalties" in paragraph 2, and inserted "to" in paragraph 3.
Amended by R.2008 d.53, effective 3/3/2008.
See: 39 N.J.R. 4385(a), 40 N.J.R. 1355(a).
In definition "Business", inserted ", such as a group of organizations under common control as defined in Section 414(b) or (c) of the Internal Revenue Code of 1986 and Federal Treasury regulations thereunder".
Recodified from N.J.A.C. 12A:2A-2.2 and amended by R.2010 d.231, effective 10/18/2010.
See: 42 N.J.R. 1495(b), 42 N.J.R. 2436(a).
In definition "Agreement", substituted "Authority" for "Commission"; added definitions "Authority", "Board" and "Chief Executive Officer"; deleted definitions "Board of Directors", "Commission" and "Secretary"; rewrote definition "Full-time employee"; in the introductory paragraphs of 1 and 2 of definition "Sales tax recapture amount", inserted a comma following "et seq."; and in paragraphs 1iii and 2iii of definition "Sales tax recapture amount" and in paragraph 3 of definition "Sales tax repayment amount", substituted "Chief Executive Officer" for "Secretary".
Amended by R.2011 d.243, effective 10/3/2011.
See: 43 N.J.R. 1415(a), 43 N.J.R. 2622(a).
Added definition "Capital investment"; and in definition "Sales tax recapture amount", in 1iii, deleted "or" from the end, in 2iii, substituted "; or" for a period at the end, and added paragraph 3.