NJ: NJEDA Creates Program to Incentivize Businesses to Bring Residents Working Out-of-State Back Home

The New Jersey Economic Development Authority (NJEDA) Board approved the creation of a new program that incentivizes businesses to re-assign New Jersey residents who are working in another state to a New Jersey location. The $35 million New Jersey Reassigning In-State Employees (NJ RISE) Program will provide grants to companies to relocate their New Jersey-resident employees, helping to redirect tax revenue to New Jersey by ensuring that residents’ income taxes stay in state.

“For far too long, other states have benefited off hardworking New Jerseyans, using their tax withholdings to fund budget priorities that grow other economies, and fund out-of-state priorities,” said Governor Phil Murphy. “Through the NJ RISE program, we will be able to bring employee tax dollars back into our state, to support initiatives that make New Jersey the best place to live, work, and raise a family.”

“New Jersey residents deserve to have their income taxes support projects in their communities, as opposed to funding another state’s coffers,” said NJEDA Chief Executive Officer Tim Sullivan. “Governor Murphy has been committed to bringing more businesses to the Garden State, and the NJ RISE program will not only help incentivize companies to reassign their New Jersey employees back to their home state, but it will also increase economic activity, and continue our efforts to grow a stronger and fairer economy.”

The NJ RISE Program is a pilot program that will provide grants to businesses principally located out of state that re-assign New Jersey residents currently assigned to work in a state that employs the “convenience of employer” income taxation rule to work in a New Jersey location. The grant is equal to the amount of New Jersey Gross Income Tax withholdings of the re-assigned resident employees during one tax year of the business, not to exceed $500,000 in the aggregate per business. The sum of all grants approved will not exceed $35 million per State fiscal year.

States such as Delaware, Nebraska, and New York use “convenience of employer” where an employee who resides out of state is taxed based on the employer's assigned location. For example, if a New Jersey-resident works in a state with “convenience of employer” (State A) three days a week and from home the other two days, the employee will be taxed by State A for all five days, because the work done from home in New Jersey was at the convenience of the employer.

“With New York moving full steam ahead with their anti-environment, anti-commuter Congestion Tax, the RISE Program offers a great opportunity to help businesses move to Jersey and ensure our families can stay here for years to come. By keeping our tax dollars here, New Jersey can lower our local property taxes, make our communities safer, and make life more affordable. It's a huge win-win,” said Congressman Josh Gottheimer (N.J.-05). "Most importantly, staying here and working from Jersey will give residents more time with their family and make it easier to get home to see the kids at night or catch a baseball game."

“My focus in Congress is bringing jobs back to the Garden State and making life more affordable for hard working New Jersey families,” said Congresswoman Mikie Sherrill (N.J.-11). “With the introduction of the NJ RISE pilot program, NJEDA is bringing hard-earned employee tax dollars back to our state so we can invest in our best in the nation public school system, our infrastructure, and first responders. I look forward to continuing to collaborate with local, state, and federal officials to create good-paying jobs, support residents, and bolster the New Jersey economy.”

“NJ RISE means more business within our borders, more in-state jobs for our residents, and more revenue to invest in our own downtowns and main streets. By launching these incentives, we're driving innovation and keeping talent close to home,” said Senator Joe Lagana (D-Paramus). “This program ensures that NJ tax dollars stay here to serve as a catalyst for local advancement.”

“Anytime we can bring tax dollars back to New Jersey from a competing state is a win in my book,” said Senator Jon Bramnick (R-Westfield). “The additional funding generated from NJ RISE will allow municipalities to support local projects and initiatives that benefit New Jerseyans, first and foremost."

“This forward-thinking pilot program will motivate businesses to re-assign more employees to work within the state, supporting local employment and bolstering our economy,” said Assemblyman Benjie Wimberly. “It is time to redirect our funds away from other states’ treasuries and focus on transforming New Jersey into the premier destination for both businesses and employees.”

“The establishment of the NJ RISE program underscores our commitment to bolstering our workforce and revitalizing our neighborhoods through strategic initiatives,” said Assemblywoman Lisa Swain. “By having New Jersey residents work in-state, we are able to help our local talent pool stay close to home where they can deepen community ties and have a greater impact on local economies.”

“This initiative represents another significant investment into our communities as we encourage businesses throughout the country to relocate their workers to the Garden State,” said Assemblyman Chris Tully. “I’m proud to have been the sponsor of the bill that created this program, to bolster our tax base, support our statewide economy, and recruit and maintain talent here in New Jersey.”

Eligible businesses must have 25 or more domestic full-time employees and be principally located in another state. Applications for the NJ RISE program are expected to open later this year. Potential applicants seeking more information on the program can send questions to njrise@njeda.gov.