Last week Governor Murphy approved legislation, Assembly bill 4495, which contained a number of technical tax changes, including the restoration of the exemption from Gross Income Tax (“GIT”) for the sale of Grow New Jersey tax credits by pass-through entities.

Since, pass-through businesses do not pay corporation business tax, these businesses must sell their Grow New Jersey tax credits to monetize the benefits.  At the end of 2017, legislation was enacted which provided an exemption from GIT for the sale of these tax credits.  However, as part of a myriad of tax changes enacted this past summer via P.L. 2018, c.48, the GIT exemption was eliminated.

As part of Assembly bill 4495, GIT will not be imposed on the sale of Grow New Jersey tax credits issued pursuant to an award approved by the New Jersey Economic Development Authority prior to July 1, 2018 regardless of when the sale of the tax credits occurs.  This is a welcome development and correction for New Jersey tax and economic development policy.

A newly formed advocacy group, BYOB New Jersey,represents a group of small business owners across the Garden State who have organized to fix the broken liquor license law in New Jersey. Local small restaurants are magnets for economic development, and BYOB New Jersey is fighting to allow neighborhood restaurants the opportunity to have local liquor permitting for table service. Specifically, the group is supporting passage of A-3494, Assemblyman John Burzichelli’s bill which creates two new classes of local liquor permits for restaurants: R-1 for wine, beer, and spirits; and R-2 just for beer and wine. No bar service would be permitted, and alcohol would only be served at the table with a meal. NAIOP NJ supports A-3494 as an important first step in reforming NJ’s antiquated liquor license laws in support of redevelopment.

On Thursday August 9, 2018, the New Jersey Appellate Division held that Prepayment Agreements requiring redevelopers to prepay a portion of the annual service charge in advance of the PILOT commencing when seeking a Long Term Tax Exemption are ultra vires and unenforceable. But perhaps more importantly, the Appellate Division held that municipalities are authorized to adopt ordinances pursuant to N.J.S.A. 40A:12A-4.1 that require an urban renewal entity to contribute to a municipal affordable housing trust fund as a condition of receiving a tax exemption under Long Term Tax Exemption Law, which is a separate and distinct requirement from a municipality’s right to impose and collect development fees under N.J.S.A. 52:27D-329.2 of the Fair Housing Act, which includes the Statewide Non-Residential Development Fee Act. The Appellate Division noted that these “contributions are expressly authorized by the Legislature under the LTTEL in N.J.S.A. 40A:12A-4.2, and are independent from and unrelated to the FHA.”

To read the case, MEPT Journal Square Urban Renewal, LLC et. al. v. The City of Jersey City, Docket No. A-2281-16T4 (App. Div. 2018) click here.

As seen on: RE-NJ.com

With the Grow New Jersey program set to expire in less than a year, the prospect of losing the incentive is already weighing heavily on the state’s commercial real estate market.

The tax credit program has been vital to everything from attracting manufacturing firms to ambitious redevelopment projects at large vacant office campuses. And while there is still time for lawmakers to extend the program before it sunsets on July 1, 2019, stakeholders say the uncertainty is already working against New Jersey.

Ted Zangari, who co-chairs the real estate department at the law firm Sills Cummis & Gross P.C., said businesses that are scouting new locations typically begin their search about 24 months before the expiration of their current lease or some other target date for moving. Such a company would likely narrow its search to a handful of sites about a year into that process, he said, but a business may not bother with a higher-cost state like New Jersey — where incentives are often needed to close the gap — if there is a chance that those programs won’t be available.

> Link to full article

Wednesday (August 1), New Jersey Attorney General Gurbir Grewal and Lt. Governor Sheila Oliver held a press conferences in Newark and Atlantic City announcing six new lawsuits filed by the State of New Jersey seeking Natural Resource Damages and cost recovery for sites in Newark, Woodbridge, Atlantic City and Warren County. The suits are the beginning of an expected program of aggressive enforcement for contaminated sites.

Continue Reading New Jersey Announces Six New NRD/Cost Recovery Suits

As seen on: ROI-NJ

In this ROI-NJ interview, Sills Cummis’ Ted Zangari and Jaime Reichardt share their insights on the recently enacted federal Opportunity Zone Program.

Ted Zangari, chair of the Redevelopment Law Practice Group at Sills Cummis & Gross P.C. in Newark, is one of the most prominent public incentives and real estate attorneys in the state. His law firm colleague Jaime Reichardt chairs the firm’s state and local tax practice and has advised clients on all sorts of complicated federal and state taxation issues.

> Link to full article

On July 27, Sills Cummis' Cecilia I. Lassiter spoke at Tax Abatements: Friend or Foe?, a half-day workshop sponsored by the American Planning Association – New Jersey Chapter and the New Jersey Builders Association.

Click here to view Ms. Lassiter's presentation.