New Jersey Offshore Wind Tax Credit Opens for Applications

Companies making a capital investment in offshore wind-related facilities in the seven southern counties of New Jersey can now apply for tax credits through New Jersey’s Offshore Wind Tax Credit Program, the New Jersey Economic Development Authority (NJEDA) said.

The Offshore Wind Tax Credit is a financial tool designed to spur private capital investment and employment growth in major, land-based offshore wind industry projects by providing reimbursement for eligible capital investments in industry-specific facilities located in the seven southern counties of New Jersey.

Under the program, businesses may qualify for tax credits of up to 100% of capital investments made in a qualified wind facility, but the tax credit amount may be limited by a net positive economic benefits test which uses the project’s estimated tax revenues to ensure the State will receive a return greater than the value of the credit. Approved entities may elect to apply 10% of the total credit amount per year over a 10-year period against their corporation business or insurance premiums tax or sell the credit for at least 75% of its value. This program is capped at USD 100 million.

To qualify for the tax credits, businesses must make a capital investment of at least USD 50 million in a qualified wind energy facility within one of seven targeted counties: Burlington, Camden, Gloucester, Salem, Cumberland, Mercer, and Cape May. Businesses leasing space at a qualified wind facility may also apply for the tax credit but will still be required to demonstrate USD 50 million in capital investment in the wind facility, at least USD 17.5 million of which is the responsibility of the prospective tenant applicant.

In addition to the capital investment requirement, businesses must also create at least 300 new, full-time jobs which may include supply chain jobs, such as manufacturers, suppliers, and installers associated with the qualified wind energy facility. Supply chain positions will only count toward the new job requirement if the employee spends at least 80% of their time in New Jersey.

NJEDA maintains the ability to reduce or revoke tax credits if businesses in the program fail to maintain facility and employment levels for the required term.

Businesses must apply for the Offshore Wind Tax Credit Program by 1 July 2024 and satisfy the capital investment and employment conditions for award of the credits by 1 July 2027.