TRENTON –The Senate Budget Committee unanimously released S1865, which will allow a corporation business tax credit for 20% of the costs of manufacturing equipment installed at a manufacturing facility in the state and 20% of the costs of improvements or additions that result in the renovation, modernization or expansion of a manufacturing facility in the state.
“We still have a lot of manufacturing here and we have the capacity to do a lot more,’’ sponsor Sen. Joseph Kyrillos said.
Neighboring states offer more competitive packages, Kyrillos said, and this bill is necessary to combat that.
“We want to incentivize, not punish,’’ the job-producers, he said.
Kyrillos said he wants to work with Treasury to figure out the costs and the lost revenue because they are unknown at this time. He said he wants to arrive at a program and cost that make sense.
The Treasury pegged the potential lost revenue at more than $330 million a year; the Office of Legislative Services estimated it at $143 million.
This bill would establish, for a period of five years, a new tax deduction for taxpayers providing loans to business located within urban enterprise zones. The substituted bill would permit lenders making loans directly to qualified UEZ business to receive tax-free treatment of the interest income earned on those loans. The tax-free treatment of the interest income would ideally serve as an incentive that will promote lending to small businesses within UEZs.