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NJ Senate Advances Virus Tax Break Bills For Businesses

By Jeannie O'Sullivan · January 28, 2021, 7:42 PM EST

The New Jersey Senate on Thursday unanimously approved pandemic-inspired bills providing tax relief for businesses that received federal paycheck assistance and those that funded workplace safety measures to reduce the spread of COVID-19.

Senate Bill 3234 ensures that Payment Protection Program loans won't be subject to state income tax, while Senate Bill 3305 establishes a gross income tax credit for nonresidential building improvements designed to stave off the virus. The bills, which were hailed by the business community, will head to the New Jersey Assembly next.

The PPP loans were a "godsend" that allowed businesses to stay open, said Sen. Troy Singleton, D-Burlington, a sponsor of S-3234.

"Our small businesses have been pummeled over the past year, many of our favorite family establishments have already closed, and numerous others are at risk of shutting down," reads a statement by Singleton, chair of the Senate Community and Urban Affairs Committee.

The unexpected extra costs of safety infrastructure weighed upon businesses already struggling to stay afloat during the pandemic, said Sens. Bob Smith, D-Middlesex and Somerset, and Steven V. Oroho, R-Morris, Sussex and Warren, the sponsors of S-3305.

"Owners are not likely to commit to these beneficial projects without some encouragement," Oroho and Smith said in a joint statement. "The temporary credits in this bill will make it more appealing to do the right thing to keep people safe during the pandemic."

Introduced on Dec. 7, S-3234 insulates PPP loans from the state's gross income tax and also permits deductions for expenses covered by the loan, even if the loan is forgiven. The bill cites Small Business Administration figures showing that New Jersey businesses and nonprofits received $17.3 billion through the program as of this month.

S-3305 was unveiled on Jan. 7 and offers income tax credits for improvements to ventilation and lighting; the installation of sneeze guards, shields and touchless entryways; and the implementation of measures such as security and thermometer use, the bill's sponsors said.

The credits will equal 75% of expenditures made for workspaces less than 30,000 square feet in size, up to $100,000, and 50% of expenditures made for workspaces bigger than 30,000 square feet, up to $250,000.

The passage of the bills received accolades from the New Jersey Business & Industry Association, which released a statement by its vice president of government affairs, Christopher Emigholz.

"New Jersey businesses certainly need tax relief and assistance wherever they can get it right now, and both of these bills will be a big benefit," Emigholz said.  

--Editing by Steven Edelstone.

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