Companies making a capital investment in offshore wind-related facilities in the seven southern counties of New Jersey can now apply for tax credits through New Jersey’s Offshore Wind Tax Credit Program, according to the New Jersey Economic Development Authority (NJEDA).
The Offshore Wind Tax Credit is a financial tool designed to spur private capital investment and employment growth in major, land-based offshore wind industry projects by providing reimbursement for eligible capital investments in industry-specific facilities located in the seven southern counties of New Jersey.
“Encouraging investment in clean energy is a key element of Governor Murphy’s vision for a stronger and fairer New Jersey economy because it creates unprecedented new opportunities for job creation while also providing a healthier, more sustainable future for our families,” said Brian Sabina, NJEDA Senior Vice President – Office of Economic Transformation.
Offshore wind is one of the high-growth, high-wage sectors the State identified in Governor Murphy’s Economic Development Plan, and this program is carefully targeted to attract major projects that will spur job creation in the short term while paving the way for long-term economic growth by anchoring a broad offshore wind manufacturing supply chain in New Jersey. Total credits approved as part of the program are capped at $100 million.
“We are excited to take this critical step forward. The new Offshore Wind Tax Credit Program is a fiscally responsible and targeted incentive that will help accelerate private sector investment into offshore wind infrastructure and manufacturing here in New Jersey. These early investment projects have the potential to attract a broader offshore wind supply chain and position New Jersey as a national leader in the industry.”
Under the program, businesses may qualify for tax credits of up to 100% of capital investments made in a qualified wind facility, but the tax credit amount may be limited by a net positive economic benefits test which uses the project’s estimated tax revenues to ensure the State will receive a return greater than the value of the credit. Approved entities may elect to apply 10% of the total credit amount per year over a 10-year period against their corporation business or insurance premiums tax or sell the credit for at least 75% of its value. This program is capped at $100 million.
To qualify for the tax credits, businesses must make a capital investment of at least $50 million in a qualified wind energy facility within one of seven targeted counties: Burlington, Camden, Gloucester, Salem, Cumberland, Mercer, and Cape May. Businesses leasing space at a qualified wind facility may also apply for the tax credit but will still be required to demonstrate $50 million in capital investment in the wind facility, at least $17.5 million of which is the responsibility of the prospective tenant applicant.
In addition to the capital investment requirement, businesses must also create at least 300 new, full-time jobs which may include supply chain jobs, such as manufacturers, suppliers, and installers associated with the qualified wind energy facility. Supply chain positions will only count toward the new job requirement if the employee spends at least 80% of their time in New Jersey.
NJEDA maintains the ability to reduce or revoke tax credits if businesses in the program fail to maintain facility and employment levels for the required term.
Businesses must apply for the Offshore Wind Tax Credit Program by July 1, 2024 and satisfy the capital investment and employment conditions for award of the credits by July 1, 2027.
An application and a complete list of eligibility requirements can be found here.
Filed Under: News, Offshore wind, Policy