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Bill

S 4027

Requires State to purchase certain unused tax credits issued under New Jersey Economic Recovery Act of 2020.

2024-2025 Regular Session Introduced by Nilsa Cruz-Perez and 2 co-sponsors

New Jersey would purchase unused Economic Recovery Act tax credits from businesses, converting tax benefits into direct state cash payments for idle credits.

Substituted by A5170 (1R)
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Bill Summary · S 4027

Legislative bill overview

S 4027 requires New Jersey to purchase unused tax credits that were issued under the Economic Recovery Act of 2020, a pandemic-era economic stimulus program. The state would essentially buy back these credits from businesses that haven't used them, converting the tax benefit into direct cash payments.

Why is this important

Businesses that received these tax credits during the pandemic may find them difficult to utilize, especially if their tax liability is low or nonexistent. This bill would allow the state to convert those idle credits into immediate liquidity for struggling companies, while also helping the state manage its outstanding tax credit obligations. However, it represents a direct state expenditure rather than foregone tax revenue.

Potential points of contention

  • Fiscal impact: Converting tax credits to direct state purchases creates a significant budget liability that wasn't anticipated when credits were initially issued; critics may argue this amounts to a costly bailout
  • Fairness concerns: Businesses that successfully utilized their credits receive no benefit, while those holding unused credits get state cash, raising questions about equity among recipients
  • Moral hazard: Purchasing unused credits may incentivize future requests for similar programs and sets a precedent that the state will subsidize underutilized tax incentives

Compiled from official sources — confirm details with the bill’s official record.

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