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New Jersey Bill Would Allow Treasury to Sell Discounted Tax Credit

Posted on June 16, 2020

A New Jersey state senator has introduced legislation that would allow the state to sell discounted tax credits to help fund programs and services amid the ongoing economic crisis.

Sen. Troy Singleton (D) announced the proposal June 11.

The bill would allow taxpayers to buy discounted tax credits from the state Treasury Department. The credits could be purchased for the next fiscal year and for up to five years after. However, taxpayers could not buy down their tax liability to less than zero. Tax credits that are unused could be carried forward for seven years, according to the bill. 

The cost to buy the credits would be:

  • 97 percent of a credit purchased for tax year 2022;

  • 94 percent of a credit purchased for tax year 2023;

  • 91 percent of a credit purchased for tax year 2024;

  • 88 percent of a credit purchased for tax year 2025; and

  • 85 percent of a credit purchased for tax year 2026.

The aggregate sale of tax credits would be capped at $5 billion and the revenue would be deposited in the “COVID-19 Economic Recovery Fund.” Once the fund reaches $5 billion, the revenue would be appropriated to the New Jersey Economic Development Authority, the Department of Education, the Department of Health, the Department of Human Services, the Department of Community Affairs, the Department of Labor and Workforce Development, and the Department of Transportation.

Singleton said the proposal is “aimed at stimulating the state economy through funding for small businesses and non-profits, community health and nutritional assistance programs, schools with budget deficits, medical assistance or social service programs, worker protections, and infrastructure projects.”

“We are currently experiencing a Depression-level economic crisis due to the COVID-19 pandemic. This financial crisis calls for a massive call to action by the state government — one that will take new approaches and bold ideas to meet this challenge,” Singleton said in the release. “This mutually beneficial recovery fund will allow people to purchase discounted tax credits, while providing government the money it needs to stimulate the economy through investments in the workforce, infrastructure, education, economic development and more.”

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