A bill sponsored by Senators Jim Whelan and Paul A. Sarlo which would expand a corporate business tax credit for research and development expenses was unanimously approved by the Senate and Assembly Wednesday, receiving final legislative approval.

“High tech research companies represent the economic future for New Jersey,” said Senator Whelan, DAtlantic. “By promoting cutting edge businesses in the Garden State, we can create high-paying jobs for our State’s well-educated workforce, and begin to reverse the last few years of growing joblessness as a result of the global recession. This bill stands to make New Jersey a national research incubator, while attracting high-tech businesses to the State and creating more jobs for our residents.”

“In the home state of Thomas Edison, this bill looks to once again make New Jersey a national leader in research and development and technological innovation,” said Senator Sarlo, D-Bergen, Essex and Passaic, and Chairman of the Senate Budget and Appropriations Committee. “Through this legislation, businesses will be able to claim a larger tax credit for qualified research costs, and will be encouraged to work with our state’s colleges and universities to foster academic-private partnerships. The end result will be more economic activity, more investment in New Jersey, and more jobs for out-of-work New Jerseyans.”

The bill, S-2980, would eliminate a restriction in the current law on the amount of the corporation business tax credit that companies can take for research and development expenses. Under the original tax credit program, companies could claim up to ten percent of qualified research expenses in the form of a credit on their corporation business tax obligation, and could claim an additional ten percent of the cost of university research funded by the company, so long as the total tax credit does not exceed 50 percent of the tax otherwise due, and that the business’s final tax liability is above the minimum threshold required by statute. Under the lawmakers’ bill, research tax credits could exceed 50 percent of a company’s tax liability, so long as the final tax liability is still above the statutory minimum.

“The R&D tax credit program is an idea with a lot of potential, and by expanding the total amount that companies can claim as a tax credit, we’re making sure this program lives up to its potential,” said Senator Sarlo. “At a time when New Jersey has to be creative in encouraging business expansion, this bill sends the right message that the Garden State is open for business. It will also allow us to get in on the ground floor of the some of the cutting edge research which will shape tomorrow’s economy and will prepare New Jersey for the future.”

“In these tough economic times, one of our main priorities has to be jobs for jobless New Jersey residents,” said Senator Whelan. “By providing a tax credit for research and development, we’re encouraging the same entrepreneurial spirit which drives the economy and puts more people back to work. This bill would ultimately help New Jerseyans get back on their feet, and would position the Garden State to be a national research and development leader for years to come.”

The bill now heads to the Governor to be signed into law.