In our previous summary of the Aspire legislation approved by both houses of the State Legislature two weeks ago and now awaiting Governor Murphy’s enactment into law (click here to view the summary of Aspire 3.0), we noted the following with respect to the usability of Aspire tax credits:
State Buyback of Tax Credits: The Aspire tax credits are only usable against the Corporate Business Tax and insurance premium taxes. Should a project redeveloper be unable to use directly or sell its credits, the State Treasury will have the discretion to purchase such credits at a floor of 0.85 cents per dollar. (Note that many of the bills’ sponsors will be introducing legislation early in the new year that would obligate the State Treasury to be the “buyer of last resort” for unutilized credits—a step that would provide the certainty and predictability that many equity investors and debt financiers give considerable weight (if not require) in the course of the underwriting process.)
Today, we are pleased to report that legislation has, in fact, been introduced to require the Director of the Division of Taxation in the Department of the Treasury to purchase unused tax credits awarded under the NJ Aspire program. Under the proposed legislation, the Director is required to purchase unused tax credits and tax credit transfer certificates awarded under NJ Aspire in an amount equal to 85 percent of the value of the tax credit, provided that certain conditions are met. To view the proposed legislation (S4027/A5170), click here.