Historians are unsure where New Jersey’s nickname the “Garden State” originated from. However, there is a certainty to New Jersey’s fast and energetic environment. The State along the east coast of the United States is accessible to major metropolises such as New York, Boston, Philadelphia, and Washington D.C. Even though the State is relatively small in size, it sits right in the middle of a huge consumer market – a perfect location for manufacturing and distribution facilities.
Business Climate
New Jersey is a hub for sciences and manufacturing. Its location itself is an attractive destination for companies to establish distribution facilities in order to reach the nation’s east coast market. Another contributor to the State’s success is its biopharmaceuticals industry. It is the home to over 400 biotech companies (big names include Johnson & Johnson, Bristol-Myers Squibb, Merck & Co., Novartis, Novo Nordisk and Bayer). New Jersey boasts the world’s highest concentration of scientists and engineers per square mile —more than 225,000 of them statewide. In fact, the number of trained pharmaceutical, biotechnology and medical technology workers in the state has more than tripled since 2001. The reason behind this is the State’s education and labor training system.
If not for agriculture, one can imply that the moniker “Garden State” is due to the State’s flourishing workforce. One of the best assets the State produces are its skilled and educated workforce.
In order to keep up with the corporate demands, the State established New Jersey Talent Networks in 2011. The Talent Networks include grants issued by the NJ Department of Labor and Workforce Development. The program focuses on connecting employers and trained employees in seven major industries which include the following:
- Advanced Manufacturing
- Financial Services
- Health Care
- Life Sciences
- Retail, Hospitality & Tourism
- Transportation, Logistics & Distribution
- Technology & Entrepreneurship
New Jersey also has its State Employment and Training Commission (SETC) in place. Its main purpose is to help companies find and train new employees with Employee Training Grants, Apprenticeship Training and On-The-Job Training programs.
If that is not enough, companies can also access, develop, and receive workforce education and training for their current and emerging employees through The Consortium for Workforce and Economic Development. The Consortium provides assistance to the current workforce for additional education and training if they wish to revisit their studies.
Tax Climate
According to the Tax Foundation’s 2016 State Business Tax Climate Index, New Jersey has the worst tax climate and correspondingly ranks 50th out of 50 states. The State has a three-bracket corporate income tax system with a bottom rate of 6.5%, and top rate of 9%. Its top rate of 9% is the 5th highest among states that levy this type of tax. New Jersey’s state and local corporate income tax collections per person were $218 in 2012 which ranked 8th highest nationally.
New Jersey’s personal income tax is comprised of six brackets starting at 1.4% and having a top rate of 8.97%. The State’s top rate ranks 6th highest among states that levy an individual income tax. New Jersey’s state and local income tax collections per person were $1,257 in 2012 which ranked 9th highest in the nation.
A contributor to its low ranking is its property tax system. It is one of just two states to levy both an inheritance tax and estate tax. This results in a high property tax burden to New Jersey residents.
Tax Credits & Incentives
Grow New Jersey Assistance Program (Grow NJ): This program was created in September 2013 as part of the New Jersey Economic Opportunity Act of 2013. Grow NJ aims to attract investment and job growth in the State. Tax credits vary on the investment project which are categorized based on purpose, industry, and Qualified Incentive Area. The credit is calculated by the amount of full-time jobs created and maintained over a period of 10 years.
- The threshold to qualify for tax breaks is as low as 10 new full-time jobs for technology start-ups and manufacturers, and 25 new jobs in targeted industries, including transportation, defense, energy, logistics, life sciences, technology, health and finance.
- Depending on the investment project type, the base amount of the credit ranges from $500 to $5,000 per new or retained full-time job per year.
- The program also include numerous bonus credits each ranging from $250 to $3,000 per job. Bonuses can be obtain through different qualified zones as well as large projects involving more than 251 new or retained jobs.
For more detailed information on the Grow NJ tax credit program, click here.
Economic and Redevelopment and Growth (ERG) Program: The ERG program was also signed into law in 2013 together with Grow NJ. This program focuses on redevelopment projects for residential and commercial purposes. The developer seeking a grant or tax credit through this program is required to have equity participation of at least 20% of the total project cost.
- Residential redevelopment projects are predominantly residential and include multi-family residential units for purchase or lease, or dormitory units for purchase or lease. Applicants can earn credits of up to 20% of total project cost with 10% bonus possible if the project constructs and reserves at least 10% of the residential units for moderate income housing.
- Each project must meet minimum requirements based upon location (i.e. minimum of $5,000,000 if the project is in a Garden State Growth Zone).
- Each approved state redevelopment incentive grant agreements will be up to 10 years.
- Commercial redevelopment projects are predominantly commercial and include retail, office and/or industrial uses for purchase or lease. The project is entitled to incentive grant reimbursement of up to 20% of total project cost, with additional grant funding possible based on project type and/or location.
- Each approved state redevelopment incentive grant agreements will be up to 20 years.
*As of 8/7/2015, the State has noted that certain allocations of tax credits available through the residential component of the Economic Redevelopment and Growth (ERG) Program are currently oversubscribed. There are still areas with available credit in which the State continues to accept applications.
For more detailed information on the NJ ERG program, click here.
Random Facts
- North Jersey is the car theft capital of the world, with more cars stolen in Newark than any other city.
- North Jersey has the most shopping malls in one area in the world with seven major shopping malls in a 25 sq. mile radius.
- Jack Nicholson, Bruce Springsteen, Bon Jovi, Sugar Hill Gang, Jason Alexander, Queen Latifa, Shaq, Judy Blume, Arron Burr, Whitney Houston, Eddie Money, Frank Sinatra, and Grover Cleveland, are all New Jersey natives.
- Passaic River was the site to the first submarine ride by inventor John P. Holland.
- The first baseball game was played in Hoboken, New Jersey.
- The game Monopoly, played all over the world, named the streets on its playing board after actual streets in Atlantic City.
