New Jersey Administrative Code › Title 19 - OTHER AGENCIES › NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY › Chapter 31H - URBAN TRANSIT HUB TAX CREDIT PROGRAM › Subchapter 1 - URBAN TRANSIT HUB TAX CREDIT PROGRAM › Section 19:31H-1.10 - Application for tax credit transfer certificate

Current through Register Vol. 56, No. 14, July 15, 2024
(a) Tax
				  credits, upon receipt thereof by a business from the Director and the
				  Authority, may be transferred, by sale or assignment, in full or in part, in an
				  amount not less than $ 25,000 of tax credits, pursuant to this section, to any
				  other person(s) that may have a tax liability pursuant to section 5 of P.L.
				  1945, c. 162 ( 54:10A-5 ), pursuant to sections 2 and 3 of P.L. 1945, c. 132 (
				  54:18A-2 and 54:18A-3 ), pursuant to section 1 of P.L. 1950, c. 231 ( 17:32-15
				  ), or pursuant to 17B:23-5. A business may apply to the Director of the
				  Division of Taxation in the Department of the Treasury and the Chief Executive
				  Officer of the Authority for an initial tax credit transfer covering one or
				  more tax periods, in lieu of the business being allowed any amount of the
				  credit against the tax liability of the business. Such application shall
				  identify the specific tax credits to be transferred (amounts, tax periods), the
				  consideration received therefor, and the identity of the transferee. Once
				  approved by the Chief Executive Officer of the Authority and the Director of
				  the Division of Taxation, a tax credit transfer certificate shall be issued to
				  the business, naming the transferee. The certificate issued to the business
				  shall include a statement waiving the business' right to claim that amount of
				  the credit against the taxes that the business has elected to sell or assign.
				  Any amount of a tax credit transfer certificate used by a purchaser or assignee
				  against a tax liability shall be subject to the same limitations and conditions
				  that apply to the use of the credits by the business that originally applied
				  for and was allowed the credits.
(b) The initial sale or assignment of any
				  amount of tax credits allowed under this section shall not be exchanged for
				  consideration received by the business of less than 75 percent of the
				  transferred credit amount before considering any further discounting to present
				  value which shall be permitted. In order to evidence this requirement, the
				  business shall submit to the Authority an executed form of standard selling
				  agreement which states that the consideration received by the business is not
				  less than 75 percent of the transferred credit amount before considering any
				  further discounting to present value which shall be permitted.
(c) In the event that the business is a
				  partnership and chooses to allocate the income realized from the sale of the
				  tax credits other than in proportion to the partners' distributive shares of
				  income or gain of the partnership, the selling agreement shall set forth the
				  allocation among the partners which has previously been submitted to the
				  Director of the Division of Taxation in the Department of the Treasury pursuant
				  to N.J.A.C. 19:31H-1.5(a).
(d)
				  Following an initial transfer of tax credits by a business that originally
				  applied for and was allowed the credits, transferees and subsequent transferees
				  of such credits may also make subsequent transfers to person(s) that may have a
				  tax liability pursuant to section 5 at P.L. 1945, c. 162 (N.J.S.A.
				  54:10A-5), pursuant to sections 2 and 3 at
				  P.L. 1945, c. 132 (N.J.S.A. 54:18A-2 and
				  54:18A-3), pursuant to section 1
				  at P.L. 1950, c. 231 (N.J.S.A. 17:32-15),
				  or pursuant to
				  N.J.S.A.
				  17B:23-5. A transferee may, upon notice to
				  the Director of the Division of Taxation in the Department of the Treasury and
				  the Authority, effectuate a subsequent tax credit transfer, in the same amount
				  and for the same tax periods set forth in such transferee's tax credit transfer
				  certificate, in lieu of the transferee being allowed any amount of the credits
				  against the tax liability of the transferee. Such subsequent transfer shall
				  occur by means of endorsement of the tax credit transfer certificate to the
				  subsequent transferee. The provisions at (b) and (c) above shall not apply to
				  such subsequent transfers.
(e) The
				  Authority shall develop and make available forms of applications and
				  certificates to implement the transfer processes described in this
				  section.