Increases grant limit for reassignment of employees to State in certain cases; requires publication of guidance and authorizes State intervention for income tax refund claims filed outside State.

S4305

SENATE, No. 4305

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MAY 18, 2026

Sponsored by:

Senator� DECLAN J. O'SCANLON, JR.

District 13 (Monmouth)

SYNOPSIS

���� Increases grant limits for reassignment of employees
to State in certain cases; requires publication of guidance and authorizes
State intervention for income tax refund claims filed outside State.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning the provision of incentives and assistance
related to the reassignment and tax refunding of resident taxpayers subject to
income taxation by other jurisdictions and amending P.L.2023, c.125.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� Section 4 of P.L.2023,
c.125 (C.34:1B-139.4) is amended to read as follows:

���� 4.��� a. There is established
a pilot program, to be administered by the New Jersey Economic Development
Authority, through which the authority shall provide grants to businesses to
assign their employees, who are New Jersey residents assigned to locations
outside of the State, to New Jersey locations.� A business shall be eligible
for a grant under the pilot program if the business has 25 or more full time
employees and is principally located in another state.

���� b.��� A business seeking a
grant pursuant to this section shall submit an application for approval to the
authority on or before July 1, 2028, in the form and manner prescribed by the
chief executive officer of the authority.� Following approval of an application,
but before the disbursement of grant funds, the authority shall require the
business to enter into a grant agreement.� The grant agreement shall, at a
minimum, specify the amount of the grant to be awarded to the business, the
minimum number of resident employees the business shall assign to the State,
and, if applicable, the terms governing actions proposed to be undertaken by
the business for the purpose of receiving the preference authorized by
subsection c. of this section.� If the authority determines that the business
made a material misrepresentation on the business's grant application or if the
business fails to comply with any requirement set forth in the grant agreement,
then the business shall return to the authority any grant awarded pursuant to
this section.

���� c.����
[
The
]

Except as
otherwise provided in subsection d. of this section, the
value of the grant
shall be the New Jersey Gross Income Tax withholdings of resident employees
re-assigned by the business to a New Jersey location, as certified by the
Director of the Division of Taxation, or $500,000, whichever is less.� In
awarding the grants made available by this section, the authority may establish
a preference for businesses that: acquire or lease office space in this State
and make a capital investment in such office space; submit to the authority a
plan showing that the business will provide bonuses to, or otherwise increase
the compensation of, employees relocating to the State; or both.� The sum of
all grants awarded pursuant to this section shall not exceed $35,000,000 in any
State fiscal year.

���� As used in this subsection,
"capital investment" means expenses that the business incurs, or are
incurred on behalf of the business by its landlord, for construction, repair,
renovation, improvement, equipping, or furnishing of a building or structure
acquired or leased by the business and used in connection with the operation of
the business.

����
d.��� Notwithstanding any provision
of any other law, rule, or regulation to the contrary, the amount of the grant
awarded to a business pursuant to this section may exceed the $500,000 limit
set forth in subsection c. of this section, if the authority determines that
the long-term gross income tax revenues generated from all resident employees
re-assigned by the business to a New Jersey location are projected to exceed 200
percent of the amount of the grant.

����
e.���� The authority shall
take appropriate measures to inform businesses potentially eligible under the
pilot program about its benefits, which measures may include, but shall not be
limited to: �advertising the pilot program in areas or publications likely to
reach such businesses; and designating an individual employed by the authority
to serve as a liaison for the authority, who may inform businesses of the
benefits of the pilot program and provide assistance concerning the submission
of applications pursuant to this section.

(cf: P.L.2023, c.125, s.4)

���� 2.��� Section 3 of P.L.2023,
c.125 (C.54A:4-1.1) is amended to read as follows:

���� 3.��� a. For taxable years
beginning on and after January 1, 2020 but before January 1, 2024, a resident
taxpayer who:

���� (1) pays any income tax or
wage tax imposed for the taxable year by another state of the United States, or
political subdivision of such state, or by the District of Columbia;

���� (2) applies for and is denied
a refund from such state or jurisdiction for taxes paid to that state or
jurisdiction on income derived from services rendered while the resident
taxpayer was within New Jersey;

���� (3) files an appeal with a tax
court or tribunal through which the resident taxpayer formally protests the
denial by another state or jurisdiction of the refund requested by the resident
taxpayer for taxes paid on income derived from services rendered while the
resident taxpayer was within New Jersey; and

���� (4) obtains a final judgement
from the tax court or tribunal resulting in the resident taxpayer being
refunded taxes paid to another state or jurisdiction on income derived from
services rendered while the resident taxpayer was within New Jersey shall be
allowed a credit against the tax otherwise due for the taxable year under the
"New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in amount
equal to 50 percent of the amount of taxes that are owed to the State of New
Jersey as a result of the readjustment of the credit for tax of another state
pursuant to subsection (e) of N.J.S.54A:4-1.

���� b.��� If the amount of the
credit allowed pursuant to subsection a. of this section exceeds the amount of
tax otherwise due, that amount of excess shall be an overpayment for the
purposes of N.J.S.54A:9-7; provided however, that subsection (f) of
N.J.S.54A:9-7 shall not apply.

����
c.���� The Division of
Taxation in the Department of the Treasury shall, in consultation with the
Division of Law in the Department of Law and Public Safety, develop and publish
on its Internet website general, plain-language guidance for a resident
taxpayer who:� applies for a refund from a state or jurisdiction on income
derived from services rendered while the resident taxpayer was within New
Jersey; and seeks a judgement granting such refund, including a judgement on
appeal, from the state or jurisdiction's appropriate tax court or tribunal.�
The guidance published pursuant to this subsection may include, but shall not
be limited to:

����
(1)�� an overview of the circumstances
under which a resident taxpayer may be entitled to a refund from a state or
jurisdiction as described in this section, including information about which
states or jurisdictions may issue a refund on this basis;

����
(2)�� resources by which a
resident taxpayer may obtain more information about the process of applying for
or appealing the denial of a refund as described in this section, which may
include, but shall not limited to, information specific to states or
jurisdictions from which resident taxpayers are likely to seek a refund, including
states or jurisdictions geographically contiguous to this State; and

����
(3)�� contact information
for individuals employed by the Division of Taxation in the Department of the
Treasury or the Division of Law in the Department of Law and Public Safety who
may be designated to answer questions from, or provide further resources to, a
resident taxpayer with respect to an application or appeal for a refund.

����
d.��� The Division of
Taxation in the Department of the Treasury, in consultation with the Division
of Law in the Department of Law and Public Safety, shall be authorized to join
or intervene on behalf of a State resident who is suing for a refund or
contesting the collection of taxes on that State resident's income by another
state or jurisdiction.

(cf: P.L.2023, c.125, s.3)

���� 3.��� This act shall take
effect immediately.

STATEMENT

���� This bill amends current
provisions of law governing the New Jersey Re-Assigning In-State Employees
pilot program (program) administered by the New Jersey Economic Development
Authority (authority).� The bill also requires the Division of Taxation in the
Department of the Treasury to publish certain guidance for resident taxpayers
seeking a refund from other states or jurisdictions.

���� Under the program, a business
may apply for a grant to support the re-assignment of employees, who are New
Jersey residents assigned to locations outside of the State, to New Jersey
locations.� Current law authorizes the authority, pursuant to a grant agreement
with a business, to issue a grant with a value equal to the New Jersey Gross
Income Tax withholdings of resident employees re-assigned by the business to a
New Jersey location or $500,000, whichever is less.� The total value of grants
under the program is limited to $35 million.

���� This bill authorizes the
authority to issue a grant to a business in excess of the $500,000 limit, when
the authority determines that the long-term gross income tax revenues generated
from all resident employees re-assigned by the business to a New Jersey
location are projected to exceed 200 percent of the grant award.� The bill also
requires the authority to take appropriate measures to inform businesses potentially
eligible under the pilot program about its benefits, which measures may
include, but not be limited to:� (1) advertising the program in areas or
publications likely to reach such businesses; and (2) designating an individual
employed by the authority to serve as a liaison for the program.

���� Additionally, the bill
requires the Division of Taxation, in consultation with the Division of Law in
the Department of Law and Public Safety, to develop and publish on its Internet
website plain-language guidance for a resident taxpayer who:� (1) applies for a
refund from a state or jurisdiction on income derived from services rendered
while the resident taxpayer was within New Jersey; and (2) seeks a judgement
granting such refund, including a judgement on appeal, from the state or
jurisdiction's appropriate tax court or tribunal.� This guidance may include,
but not be limited to:� (1) an overview of the circumstances under which a
resident taxpayer may be entitled to a refund from a state or jurisdiction; (2)
resources by which a resident taxpayer may obtain more information about the
process of applying for or appealing the denial of a refund; and (3) contact
information for individuals employed by the Division of Taxation or the
Division of Law who may be designated to answer questions from, or provide
further resources to, a resident taxpayer with respect to an application or
appeal for a refund.

���� The bill also authorizes the Division
of Taxation, in consultation with the Division of Law in the Department of Law
and Public Safety, to join or intervene on behalf of a State resident who is
suing for a refund or contesting the collection of taxes on that State
resident's income by another state or jurisdiction.