New Jersey’s small businesses could receive $1,000 in tax credits per employee and be allowed to delay tax payments to the state under bills before the state Senate on Monday that seek relief for businesses crippled by the coronavirus crisis.
Both the state Senate and Assembly will hold remote sessions Monday to vote on a multitude of coronavirus proposals targeting homeowners, renters, medical providers, taxpayers and primary voters.
Under one bill, (S2348), small businesses with 10 or fewer full-time equivalent employees would be eligible for tax credits of up to $1,000 for each employee. The tax credit is based on the employee retention credit included in the federal stimulus package.
Under another proposal (S2347), small businesses could apply to the state’s Economic Development Authority for the chance to delay remitting taxes they collect on behalf of the state, including sales and use taxes, workers’ compensation contributions, unemployment compensation contributions, temporary disability leave benefits contributions, and family temporary leave contributions.
The deferral is, in effect, a short-term loan to businesses with little cash reserves. Senate President Stephen Sweeney, who sponsored both bills, said extending the state’s fiscal year through September gives it the opportunity to pass that flexibility onto business owners.
“Both of those bills are geared at trying to keep small businesses alive,” Sweeney, D-Gloucester, said. “A lot of small businesses, at the most, have a month’s cash supply, and what we’re trying to do is to keep businesses afloat.”
The consequences of the coronavirus have been crippling for New Jersey businesses, many of which are deemed nonessential and have been ordered to close or drastically scale back their services. The result has been a stunning surge in unemployment claims, including nearly 577,000 in New Jersey and more than 16 million in the U.S. over three weeks.
Both the state and federal governments have rolled out programs offering financial assistance to businesses that retain or rehire their employees. A small grant program through the state drew more than 32,000 applications for between 1,250 and 2,000 available grants offering up to $5,000.
“They’re all trying to put money in the pockets of small businesses,” Sweeney said. “A lot of these restaurants and businesses are not going to survive this if we don’t find a way to help them.”
Lawmakers will also consider a bill (S2353) giving businesses a reprieve from a much-heralded new state law that requires employers with at least 100 employees pay their workers one week’s severance for every year of service as part of a mass layoff.
This first-in-the-nation law was motivated by the plight of unemployed Toys "R" Us workers initially let go from the Wayne-based toy store chain without severance.
The law is slated to take effect in mid-July but that start date would be delayed until 90 days after New Jersey’s state of emergency is canceled.