GOVERNOR CORZINE SIGNS LEGISLATION AIMED AT ENCOURGING BUSINESS GROWTH

TRENTON – In a move aimed at helping the New Jersey business community through one of the worst national economic downturns in decades, Governor Jon S. Corzine today signed legislation to ease the tax burden on businesses by allowing them to carry operating losses forward for up to 20 years. “Fast-growth businesses, high-tech businesses, businesses focusing on the industries of the future inevitably sustain significant losses in the initial years of start-up, losses that can take years to recoup,” Governor Corzine said. “This legislation sends a clear message to those firms: you are welcome in New Jersey, and we will work with you so we can grow and prosper together.” The bill, S-2130, is a key part of the economic assistance and recovery plan Governor Corzine announced in October. The bill extends the net operating loss carry-forward from seven to 20 years, which means that New Jersey law will now mirror the federal tax code and the tax codes of many other states. “Now more than ever, this bill is desperately needed,” said Senator Richard J. Codey (D-Essex), sponsor of the bill. “With many businesses struggling and others facing still unforeseen losses, we need to do all we can to help them weather the storm. This bill will also help New Jersey stay competitive with many of our neighboring states that have similar provisions.”The change will allow businesses to more equitably balance profits with losses over 20 years instead of seven years when calculating corporate tax liabilities to the state, creating a more level playing field that is expected to encourage companies to invest in New Jersey. The longer period aims to help New Jersey’s economy by making state law more consistent with the rest of the country, thus making the Garden State more competitive as a location for new businesses, relocations, and expansions. “This is aimed squarely at the small businesses that are the lifeblood of this state,” said Assemblyman Louis Greenwald (D-Camden), lead Assembly sponsor of the bill. “Small businesses need every chance to stay competitive, invest in their operations and retain precious jobs. This move is just what these tough times require and builds on other vital steps we’ve taken to ensure businesses that employ our residents remain strong.” Status of Economic Assistance and Recovery Plan Legislation November 24, 2008 Immediate Relief (two bills)