$500M In Tax Breaks Approved For New Jersey’s Manufacturing Industry

New Jersey has cleared the way for $500 million in tax breaks in an attempt to create “good-paying” jobs and spark growth in the state’s manufacturing industry.

Gov. Phil Murphy signed A5687/S4407 into law on Wednesday. The bipartisan bill, which has picked up support from Democratic and Republican lawmakers, authorizes a new, $500 million tax credit program that incentivizes manufacturing investment and job creation.

Dubbed the “Next New Jersey Manufacturing Program,” it will be administered by the New Jersey Economic Development Authority (NJEDA). The primary sponsors are Sens. Michael Testa and Linda Greenstein, and Assembly members Louis Greenwald, Antwan McClellan and Verlina Reynolds-Jackson.

“From the industries that powered our early growth to the advanced facilities driving innovation today, manufacturing continues to play a vital role in shaping New Jersey’s economy and its future,” Murphy said.

The news also got a thumbs-up from U.S. Rep. Rob Menendez Jr. (NJ-8), who called it a “powerful example of how our state is leading the way on creating good jobs and investing in local businesses.”

Here’s how it will work, according to the governor’s office:

“Under the program, eligible businesses in manufacturing industries including advanced manufacturing, non-retail food and beverage, defense, clean energy and life sciences can receive a tax credit award equal to the lesser of 0.1 percent of the eligible business’s total capital investment multiplied by the number of new full-time jobs or 25 percent of the eligible business’s total qualified investment, subject to a total cap of $150 million per project. $100 million in tax credits in the first two years will be reserved for clean energy product manufacturers in industries such as solar, geothermal, and green hydrogen, supporting innovative companies to further the state’s clean energy goals and support clean manufacturing. After the first two years of the program, any unused proceeds will roll over into the general manufacturing allocation.”

The program will offer stackable bonuses to companies holding New Jersey business certifications, including minority and women business enterprises, businesses located in “Opportunity Zones,” or companies that have collective bargaining agreements or labor harmony agreements in place.

For a list of available bonuses and information on eligibility requirements and potential awards, click here.

Several business advocacy groups applauded the new tax break program, including the New Jersey Business & Industry Association.

“This law represents a significant and targeted investment for New Jersey’s manufacturing sector and our economy – with no new additional funding required,” president and CEO Michele Siekerka said.

“It will support much-needed workforce development in manufacturing amid both federal tariff and supply chain uncertainty that challenges these important businesses,” Siekerka said. “And it will incentivize a wide range of manufacturing activities, including advanced manufacturing, food and beverage production, life sciences, defense, and clean energy component manufacturing.”

Other support came from:

Eddie Russnow, President, MAC Products Inc. – “As a family-owned business that lives by the motto ‘We Don’t Do Easy,’ we understand the importance of resilient, in-state manufacturing capacity. The Next New Jersey Manufacturing Program will propel local investment, fuel job creation, and reinforce the innovation and integrity at the heart of our operations—and the operations of manufacturers across the state.”

Peter Connolly, CEO, New Jersey Manufacturing Extension Program Inc. – “This bill represents a vital investment in New Jersey’s future, supporting the full spectrum of manufacturing, including the clean energy sectors, while empowering the workforce that drives them … With this robust support in place, this $500 million incentive can translate into real high-quality jobs and tangible economic opportunity for the people of New Jersey.”

Tom Bracken, President and CEO, New Jersey Chamber of Commerce – “The Next New Jersey Manufacturing Program aims to encourage innovation, attract new industries, and expand career opportunities in the state. By combining targeted tax incentives with the strengths of our workforce, we’re creating a stronger environment for businesses to build and grow in the Garden State.”

Christina Renna, President and CEO, Chamber of Commerce Southern New Jersey – “New Jersey’s manufacturers are the backbone of our economy, and this program provides the kind of bold, targeted investment needed to keep them competitive in a rapidly changing economic landscape. By prioritizing innovation, job creation, and in-state capital investment, the Next New Jersey Manufacturing Program sends a clear message: our state is serious about building things here at home and supporting manufacturers up and down the state.”

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