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New Jersey Close to Revamping Tax Credit System

The Garden State is close to enacting a new law that would totally reshape the tax credit system for businesses. The current system has five tax incentive programs in place while the new system would only have two. This slimming down is actually better for business-they will have more opportunities to get tax credits with lower investing requirements.

The new law is expected to save up to $350 million over ten years per company. While critics argue that this will dry up much needed revenue streams, proponents indicate that the current, high investing requirement ($50 million in some cases) is preventing many businesses from creating that revenue in the first place. One tax credit that is poised to get a major overhaul, the Urban Transit Hub Tax Credit, is currently only restricted to certain cities within the state. Under the new law some of the state's weakest and most underdeveloped cities will become the main focus while larger swaths of the rest of New Jersey can also apply for some of the credits. The investment amount threshold will also be reduced in most cases from the current $50 million.

Governor Chris Christie is expected to sign the law this month at which point rules can be drafted. It is unclear what impact this will have on neighboring states such as Pennsylvania and New York, but it should have a rather positive impact on business growth in New Jersey.

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