New York is benefiting greatly from the Tax Cuts and Jobs Act enacted by Republicans in 2017:
New Jersey Families See Increased Tax Simplification and Tax Reduction. Americans at every income level have seen significant tax reduction. 90 percent of families and individuals are seeing increased take-home pay across the country. There are numerous reforms in the bill that benefit taxpayers in New Jersey and across the country:
- The Tax Cuts and Jobs Act doubled the child tax credit from $1,000 to $2,000 per child. 563,170 New Jersey families took the Child Tax Credit in 2015.
- The Tax Cuts and Jobs Act doubled the standard deduction for an individual from $6,000 to $12,000 and for a family from $12,000 to $24,000. 2,574,770 New Jersey families and individuals took the standard deduction in 2015.
- The Tax Cuts and Jobs Act raised the threshold of the Alternative Minimum Tax so fewer taxpayers are forced to comply with the provision. 279,740 New Jersey families paid the Alternative Minimum Tax in 2015.
New Jersey Middle Class Families See Increased Take-Home Pay. In 2018, New Jersey taxpayers will see average tax reduction of $1,490 and around 6 in 10 New Jersey taxpayers see an average federal tax cut of $2,740.
- 90 percent of New Jersey taxpayers with annual income of between $48,300 and $77,300 will see an average federal tax cut of $930 in 2018.
- 84 percent of New Jersey taxpayers with annual income between $77,300 and $135,800 will see an average federal tax cut of $1,390 in 2018.
- 80 percent of New Jersey taxpayers with annual income between $135,800 and $314,500 will see an average federal tax cut of $3,070 in 2018.
New Jersey Families See Relief From the Individual Mandate Tax Penalty. Obamacare imposed a tax penalty of $695 for an individual and $2,085 for a family of four for failing to buy “qualifying” health insurance as defined by the federal government. The Tax Cuts and Jobs Act repeals this unfair tax.
The individual mandate tax penalty is one of the most regressive taxes in the code as it disproportionately impacts low and middle-income families:
- 188,570 New Jersey individuals and families paid a total of $93,342,000 in individual mandate tax penalties in 2015.
- 37.56 percent of New Jersey taxpayers (70,830 households) that paid the individual mandate made less than $25,000 in annual income.
- 77.91 percent of New Jersey taxpayers (146,910 households) that paid the individual mandate made less than $50,000 in annual income.
Tax Reform Benefits Businesses and Workers in New Jersey. The Tax Cuts and Jobs Act reduced the federal corporate tax rate to 21 percent and established a 20 percent small business deduction. Businesses across the state have responded by announcing pay raises, bonuses, 401(k) match increases, and expansions. For example:
- Tingley Rubber Corporation – based in Piscataway, New Jersey – announced one-time bonuses of $1,000 because of the recent tax reform passed by Congress.
- Quest Diagnostics Incorporated – based in Secaucus, New Jersey – has announced bonuses of up to $500 for 40,000 employees.
- Amicus Therapeutics – based in Cranbury, New Jersey – will build a $200 million facility in the U.S. instead of Europe because of tax reform. The factory will produce a new drug designed to treat Pompe, a rare, fatal disease. The facility will employ at least 200 people with an average salary of $100,000.
- Lowe’s – (5,000 employees at 39 stores and two distribution centers in New Jersey). Employees will receive bonuses of up to $1,000 based on length of service, expanded benefits and maternity/parental leave, and $5,000 of adoption assistance.
- Amboy Bank – based in Old Bridge, New Jersey – is increasing its employee base wage to $15 per hour and giving $1,000 bonuses for non-executive employees.
Lower utility bills: As a direct result of the TCJA’s corporate tax rate cut, New Jersey residents are saving money on utility bills. Lower electric, water, and gas bills help households and small businesses operating on tight margins. For example, at least fourteen New Jersey utilities reduced their customers’ bills (see below).
New Jersey companies of all sizes give powerful testimonials to the power of tax reform:
Metallix (Shrewsbury, New Jersey) – Employee bonuses, investing in business growth:
First order of business? Giving each of Metallix’s 98 workers a $1,000 bonus, an unexpected surprise that came just days after tax reform took effect.
“From the outset, the company wanted to share the benefits of tax reform with our employees,” said Maria Piastre, president of Metallix. “On February 14, every employee received a net $1,000 after-tax bonus in response to tax reform. Coming so soon after our usual end-of-year bonuses, it was completely unexpected by Metallix employees, and we were all very happy to receive it.”
Metallix wasn’t shy about tying these bonuses directly to tax reform. Each employee also received a letter from Metallix owner Eric Leiner, who explained that tax reform was going to mean a big boost to the company—and that he wanted to make sure employees were receiving their share of the good fortune. Metallix employees clearly took this sentiment to heart.
Piastre said that, months after the bonuses were given out, many employees still had Leiner’s letter hung proudly at their desks.
Piastre also explained that Metallix was using some of the benefits of tax reform to grow their business—and that significant investments were now more feasible because the company’s taxes had been so substantially lowered. – August 2, 2018, National Association of Manufacturers article excerpt
Honeywell (Morris Plains, New Jersey) – increased 401(k) match:
“I am confident in Honeywell’s future, and our ability to continue to deliver for our shareowners and our employees. Our strong performance in 2017, together with the enactment of new U.S. tax legislation, has enabled us to increase our 401(k) match in the U.S. This is a sustained, annual benefit that will provide a more secure retirement for our employees. We believe that enhancing this benefit is extremely valuable and important to our employees over the long term,” Adamczyk concluded.—Jan. 26 2018, Honeywell press release
Flemington Car & Truck Family of Brands (Flemington, New Jersey) — $500 employee bonuses:
The new tax reform law is giving some benefits to New Jerseyans. The Flemington Car and Truck Country Family of Brands, a new and used car dealership in Flemington, is awarding each of its full-time employees a $500 bonus because of the recently passed federal Tax Cuts and Jobs Act.
As a result of the corporate tax rate cut under the new law to 21 percent from 35 percent, the company will also look to upgrade its facility and hire additional workers. The dealership is 41 years old and has 17 brands in eight different locations.
“We believe this is the right thing to do,” said company chairman Steve Kalafer, in a written statement. “Reinvesting tax savings in our employees and our businesses will make our communities and America stronger. We call on all of the auto manufacturers we work with to help drive economic growth by giving back to the communities where they employ and invest with appropriate employee bonuses and by creating new jobs with their new capacity for additional capital expenditures.” – Jan. 8, 2018 NJ Biz article excerpt
Quest Diagnostics Incorporated (Secaucus, New Jersey) — Bonuses of up to $500 for 40,000 employees:
Tax Reform Benefit
In 2018 the company expects to realize approximately $180 million in tax savings on an adjusted basis. Of this amount, the company plans to reinvest roughly $75 million before tax back into the business and its employees, resulting in a benefit of approximately $120 million to net earnings. Investment initiatives include:
-Advanced diagnostics innovation through new tests and high-touch concierge services;
-Investments to deliver a consistently excellent consumer experience both online through the MyQuest mobile patient application and patient service centers; and
-A bonus of up to $500 for nearly 40,000 employees to be paid based on the company’s performance in 2018. — Feb. 1 2018, Quest Diagnostics Incorporated press release
Merck (Kenilworth, New Jersey) — Bonuses (details to be announced); increased charitable donations; increased capital expenditures:
“The recently enacted U.S. tax legislation improves Merck’s financial flexibility to invest in sustainable long-term value creating opportunities. In addition to the company’s ongoing investment in R&D, business development and continued support of the dividend, as well as share repurchases, the company also:
- Plans to invest approximately $12 billion over 5 years in capital projects including approximately $8 billion in the United States
- Made a contribution to the Merck Foundation in the fourth quarter of 2017
- Plans to provide a one-time, long-term incentive award for its eligible non-executive employees in the second quarter of 2018” – Feb. 2 2018, Merck press release
Tingley Rubber Company (Piscataway, New Jersey) — $1,000 bonuses:
New Jersey based Tingley Rubber Corporation will be issuing all U.S. based employees one-time bonuses of $1,000 because of the recent tax reform passed by Congress.
Tingley’s ownership announced Thursday its plans to share some of the tax benefit directly with their employees to express the company’s gratitude. The 122-year-old, fifth generation family owned business joins many businesses across the country in giving employee bonuses after Congress passed a sweeping tax cut for businesses and individuals.
President Donald Trump signed a bill on December 22nd overhauling the nation’s tax code. One of the biggest changes included in the bill cuts the corporate tax rate from 35 percent to 21 percent for qualifying corporations. The bill also restructures and lowers the seven personal income tax brackets.
Based in Piscataway, NJ the privately held Tingley Rubber Corporation announced the bonuses during an employee luncheon held on March 22nd. The $1,000 bonuses will also be eligible for the company’s 401(k) plan deferral with the standard corporate match.
“The economic development that should come as a direct result of the new tax reform legislation and deregulations will positively affect Tingley’s ability to grow its business. The tax reform package will allow Tingley to invest more into our strategic initiatives, and better serve our customers, as well as our employees and shareholders,” said Owner and Chairman of the Board, Bruce McCollum. Bruce’s son and owner JB McCollum said “We are excited for the opportunity to reward our dedicated and hard-working employees with this special bonus as a token of our gratitude.”
President & COO, Mike Zedalis, expressed his gratitude to the McCollum family and sees the new tax plan as a major boost to Tingley: “Our company continues to grow, and enhanced investment into our operations will always bring benefits to our customers, employees and shareholders.”
Tingley Rubber Corporation is a leading supplier of protective footwear and clothing and has been protecting generations of workers since 1896. — March 26, 2018 Tingley Rubber Corporation press release
Atlantic City Electric (Atlantic City, New Jersey) – The utility will pass along tax cut savings to customers:
Atlantic City Electric will provide $23 million in annual tax savings to its customers. The company made a filing this month with the New Jersey Board of Public Utilities, which was approved on March 26, 2018. Customers will begin to see reductions on their bills around April 1, 2018. – April 3, 2018, Exelon Utilities press release excerpt
Public Service Enterprise Group (Newark, New Jersey) – The utility will pass along tax reform savings to customers:
Public Service Electric and Gas Co. (PSE&G) today proposed to lower customer bills by approximately 2 percent on April 1 to pass on the benefits of the federal tax reform legislation enacted earlier this year.
In its filing with the NJ Board of Public Utilities, PSE&G will reduce rates by approximately $114 million on an annual basis effective April 1 to reflect lower federal taxes the utility will pay. The typical residential combined electric and gas customer will save nearly $41 per year. – March 2, 2018, PSE&G Press Release
New Jersey American Water (Camden, New Jersey) – The utility will pass along tax reform savings to customers:
The New Jersey Board of Public Utilities (BPU) today approved changes to New Jersey American Water’s base water and wastewater rates. The BPU also approved a credit resulting in the pass-back to customers over the next 10 months of $32.5 million in excess accumulated deferred income taxes associated with the Tax Cuts and Jobs Act. For the average residential customer, the base rate increase of $39 million annually will be offset by the credit through August 31, 2021 – October 28, 2020 American Water press release
New Jersey Natural Gas (Wall Township, New Jersey) – The utility will pass along tax reform savings to customers:
New Jersey Natural Gas (NJNG), a regulated subsidiary of New Jersey Resources (NYSE: NJR), today submitted a filing to the New Jersey Board of Public Utilities (BPU) to pass through the benefits of the recently enacted federal tax reform to customers. NJNG announced it will reduce customers’ rates by $21 million, effective April 1, 2018, resulting in a $31, or 3 percent, decrease to a typical residential heating customer’s annual bill.
NJNG also announced it will provide a one-time refund to customers totaling approximately $31 million. The estimated refund for a typical residential heat customer is $47. The actual refund amounts will be determined in May and reflect individual customer usage. Pending BPU approval, customers can expect to see these savings in their May or June bills.
For the rate decrease, a typical residential heating customer using 1,000 therms a year will see their annual bill go from $1,054 to $1,023, a savings of $31. When combined with the one-time refund, the customer will see an overall reduction of $78 or 7.4 percent this year. This adjustment will help ensure rates reflect the lower tax structure and any appropriate savings are passed on to customers.
“Our top priority is to ensure we deliver safe, reliable and affordable service to our customers, said Laurence M. Downes, chairman and CEO of New Jersey Resources. “We are pleased to pass along the benefits of tax reform to our customers through lower energy bills.” – March 2, 2018 New Jersey Resources press release excerpt
Rockland Electric Company (Pearl River, New York) – The utility will pass along tax reform savings to customers:
On March 2, 2018, the Company filed its petition pursuant to the Generic TCJA Order, including proposed tariffs as well as a proposed plan. Specifically, RECO’s petition stated that the 2017 TCJA would result in an annual revenue requirement reduction for the Company of approximately $2.868 million, as of April 1, 2018. The Company decreased its net deferred tax liabilities by $45 million, decreased its regulatory asset of future income tax by $17.million and accrued a regulatory liability for future income tax of $28 million. REGO calculated its new interim rates effective April 1, 2018 using billing determinants underlying the distribution rates established in RECO’s 2016 Base Rate Case. The Company calculated the current level of revenue based on the currently effective rates and allocated the distribution decrease among the service classifications in proportion to the relative contribution made by each class to the total current level of revenue.
The Company proposed to return to ratepayers the amounts deferred pursuant to the Generic TCJA Order for the period of January 1, 2018 until the effective date of the Company’s new rates, by means of a sur-credit. The Company proposed to employ a short-term borrowing rate to accrue interest on the deferred amounts until the Company’s returns such amount to ratepayers. The Company would return this total deferral amount over twelve (12) consecutive calendar months, commencing with the month immediately following when the Board issues an order approving the Company’s new rate. The sur-credit would be applied to all service classifications on an equal per kWh basis for the twelve (12) month period. According to the petition, the Company’s final effective rates reflect the proposed refund of the full amount of the excess accumulated deferred federal income tax liability to ratepayers. – June 22, 2018 New Jersey Board of Public Utilities document
Atlantic City Sewerage Company (Atlantic City, New Jersey) – The utility will pass along tax reform savings to customers:
The Update noted that effective April 1, 2018, ACSC implemented a rate decrease, to reflect the fact that the tax expense reflected in ACSC’s rates had been calculated at the statutory 34% rate. The new rates, made effective April 1, 2018, were based upon the new statutory rate of 21%.
The Update noted that the April 1, 2018 rate reduction was based upon a reduction in income tax expense of $319,945.00. After applying ACSC’s gross up factor, the rate decrease became an annual revenue reduction of $472,838.00. – February 27, 2019 New Jersey Board of Public Utilities document
SUEZ Water New Jersey, Inc. (Paramus, New Jersey) – The utility will pass along tax reform savings to customers:
On March 5, 2018, pursuant to the Generic Tax Order, SUEZ Water New Jersey, Inc., SUEZ Water Toms River, Inc. and SUEZ Water Arlington Hills, Inc. (collectively, “Joint Petitioners” or “Companies”) filed a joint petition requesting Board approval to implement a reduction in base rates effective April 1, 2018, of $12.1 million for SUEZ Water New Jersey, Inc., $1.6 million for SUEZ Water Toms River, Inc. and $0.2 million for SUEZ Water Arlington Hills, Inc.
On March 26, 2018, the Board issued an Order (“March 2018 Order”) approving the implementation of the Joint Petitioners’ proposed rate reduction on an interim basis, effective April 1, 2018. The proposed refund and other rider tariffs were deferred until a later date. – February 27, 2019 New Jersey Board of Public Utilities document
Middlesex Water Company (Iselin, New Jersey) – The utility will pass along tax reform savings to customers:
On March 26, 2018, the Board issued an Order Adopting Initial Decision/Settlement (“Middlesex Rate Case Order”) in BPU Docket No. WR17101049, Middlesex’s most recent base rate case. 3 This Order adopted a Stipulation of Settlement (“Rate Case Stipulation”) executed by Middlesex, the New Jersey Division of Rate Counsel and Board Staff (“Parties”). Under the Rate Case Stipulation, the Parties agreed that the Company included in the Rate Case Stipulation the effect on Middlesex’s rates of both phases of the required calculations as set forth in the Board’s Generic Tax Order.4 This included $500,000 for Phase Two adjustments accounted for as a result of an analysis performed by the Company and reviewed by the Parties. 5 The Parties further agreed in the Rate Case Stipulation to continue to review any calculations associated with the Company’s Phase Two adjustments on an ongoing basis, and to resolve any issues if they were to arise. 6 In addition, the Company agreed that, in the event the Phase Two adjustment resulted in less than the $500,000 returned to customers with the Board’s approval of the Rate Case Stipulation, no further adjustment will be made. – August 29, 2018 New Jersey Board of Public Utilities document
Gordon’s Corner Water Company (Marlboro, New Jersey) – The utility will pass along tax reform savings to customers:
The Parties stipulated and agreed that all issues and requirements set forth in the Generic Tax Order as applied to Gordon’s Corner were resolved. 5 Consistent with the Rate CaseStipulation, Gordon’s Corner’s new rates to be set as a result of that case include a one-time $0.56 (i.e., a 56 cent) credit per customer, reflecting a stub period total credit due to customers of $8,394. This credit resolves both this matter with respect to Docket No. Ax:18010001 as well as all issues in the Gordon’s Corner Rate Case, associated with both Phase One and Phase Two of the Generic Tax Order. The Board NOTES that Gordon’s Corner has already complied with Phase One of the Generic Tax Order by lowering its volumetric rate from $5.15 to $5.04, or $154,676 on an annual basis, The Board FURTHER NOTES that the new base rates agreed to by the Rate Case Stipulation reflect a rate base adjustment of $137,421, which represents the Accelerated Deferred Income Tax owed to ratepayers pursuant to the 2017 Tax Cuts Act. – August 29, 2018 New Jersey Board of Public Utilities document
Jersey Central Power and Light Company (Holmdel, New Jersey) – The utility will pass along tax reform savings to customers:
On March 2, 2018, the Company filed a petition pursuant to the Generic TCJA Order, which included proposed tariffs as well as a proposed plan. According to the petition, JCP&L recalculated its base rates to incorporate the impact of the mandatory reduction in the federal corporate income tax (“FIT”) rate from 35% percent to 21%, effective January 1, 2018 in accordance with the 2017 Act and the Generic TCJA Order. JCP&L’s proposed methodology and quantifications of the effects of the 2017 Act included the following: (1) a reduction in the FIT rate which would result in a base rate reduction of $28.6 million annually for the Company; (2) a deferral, as a regulatory liability, of $6.3 million on its books, with interest, for the impact of the reduction in the FIT rate on its tax gross-up between January 1, 2018 and March 31, 2018; and (3) non-rate base (unprotected) Excess Deferred Income Taxes (“EDITs”) of $90.89 million to be amortized over a ten-year period (levelized). – May 8, 2019 New Jersey Board of Public Utilities document
South Jersey Gas Company (Folsom, New Jersey) – The utility will pass along tax reform savings to customers:
On March 2, 2018, the Company filed its petition pursuant to the Generic TCJA Order, including proposed tariffs as well as a proposed plan. Specifically, SJG stated that it planned: (1) a reduction in base rates of $25.88 million effective April 1, 2018; (2) a corresponding estimated $12.88 million refund to customers for the period January 1, 2018 through March 31, 2018 for the corresponding rate adjustment (including interest at the Company’s short-term debt rate and (3) are-measurement and adjustment to rates related tci the “Unprotected” excess deferred income taxes of approximately $27.1 million associated with the implementation of the 2017 Act. – September 17, 2018 New Jersey Board of Public Utilities document
Elizabethtown Gas (Union, New Jersey) – The utility will pass along tax reform savings to customers:
On March 2, 2018, the Company filed its petition pursuant to the Generic TCJA Order, including proposed tariffs as w~II as a proposed plan. Specifically, ETG requested an annual reduction in firm distribution revenues of $10,938,818, effective April 1, 2018, which represents a 6.6% decrease. The Company also requested authorization to refund to customers for the difference between the effective April 1, 2018 rate and charges for January 1, 2018 through March 31, 2018, which was estimated to be $5.6 million. The Company proposed to refund the $5.6 million in a billing cycle during or before September 2018. Alternatively, the Company proposed to provide the refunds in May 2018 by filing a true-up after final rate approval by the Board. ETG proposed that the one-time refund would include interest at the Company’s short-term debt rate as specified in the Company’s last base rate case3 and· New Jersey Sales and Use Tax. ETG’s calculations include an adjustment to eliminate all Investment tax credits for the revenue requirements. The Company’s revenue factor will be reduced to 1.40828098. Additionally, the Company will use the Average Rate Assumption Method (“ARAM”) to amortize the protected excess deferred tax liability and proposed to amortize the unprotected potions of the excess • over five (5) years. ETG’s rate base includes an offset for deferred taxes, a portion of which will be used to provide customers an ongoing carrying cost benefit to the pre-tax weighted average cost of capital. To accomplish the rate reduction, the Company proposed to only reduce the distribution charges of its firm service classification and leave the monthly service charges untouched. The Weather Normalization Clause Margin Revenue Factor would be adjusted, effective January 1, 2018, to realize the full benefit of the 2017 Tax Act. – June 22, 2018 New Jersey Board of Public Utilities document
Aqua New Jersey (Hamilton Township, New Jersey) – The utility will pass along tax reform savings to customers:
On March 2, 2018, the Company filed its petition pursuant to the January 31, 2018 Generic TCJA Order, including proposed tariffs as well as a proposed plan. The Company’s filing and proposed tariffs did not include an across-the-board rate reduction reflecting the reduction in the corporate tax rate from thirty-five percent (35%) to twenty-one (21 %). Therefore, Aqua refiled its petition (“Tax Rate Adjustment Filing”) which reflected the reduction in the corporate tax rate from thirty-five percent (35%) to twenty-one percent (21%) on March 19, 2018.
The Company represented that this rate change and one-time refund results in an overall rate decrease of approximately 6.8% to the average residential water customer using 5,000 gallons of water per month. – July 25, 2018 New Jersey Board of Public Utilities document
New Jersey-American Water Company (Camden, New Jersey) – The utility will pass along tax reform savings to customers:
The Signatory Parties have reviewed the Company’s filing, exchanged discovery, filed comments and reply comments, and reached a resolution with regard to the disposition of the stub period amount and the difference between the originally implemented rate decrease of 5.88% and the agreed upon rate decrease of 6.12%. The resulting Partial Stipulation will result in NJAW issuing the agreed upon one-time credit to its customers. – July 10, 2019 New Jersey Board of Public Utilities document
Carneys Point Township (Carneys Point, New Jersey) — The township is building a warehouse in an Opportunity Zone created by the Tax Cuts and Jobs Act:
A 1.284 million square foot warehouse complex is coming to Carneys Point Township. The deal, signed at the end of March, will be one of the many projects on tap for the Salem County town. Although the tenant utilizing the warehouse has not been finalized, the warehouse is expected to create as many as 500 jobs.
The rural town of 7,100 is located in the state’s least populated county, which struggles with high unemployment figures (6.3% in February compared to the state’s average of 4.7%) and low household income of about $52,800 on average.
The warehouse will be close to the McLane Distribution Center, a Wawa fulfillment center located on the westbound side of Route 40 that has already expanded multiple times. Plans include installing a traffic light at Courses Landing Road at Route 40, an intersection that’s been a problem area for years, according to Carneys Point Township Mayor Ken Brown
“What really makes me happy is everybody in our government in our township worked together on this project,” said Brown. “From our codes people to our committee people, to our office personnel, to
our attorneys, and everybody else with one focus: To get this job done and bring jobs to our town.”
New Jersey-based Arbok Partners and Panattoni Development Company will build the warehouse. Both companies and the partnership specialize in industrial development.
Bo Farkas, who oversees all acquisition and development opportunities for Arbok Partners, said searching for potential areas for development is like trying to find “diamonds in the rough.” Carneys Point fit the bill for the warehouse project. The area is minutes from the New Jersey Turnpike, close to the last exit before heading over the Delaware Memorial Bridge.
“One of the things that New Jersey has a shortage of are big box distribution buildings, especially those in the one million square feet size range. That was the main impetus for seeking out larger sites like the one in Carneys Point.”
Carneys Point is one of two Salem County municipalities designated as an opportunity zone, an initiative the state says tries to bring more development and economic opportunities to urban and rural areas. — April 7, 2019 South Jersey Times article
Amicus Therapeutics (Cranbury, New Jersey) – In order to find a cure for a rare disease, the company is building a $200 million facility in the United States instead of overseas. The facility will employ at least 200 people who will earn an average of over $100,000 per year:
Specialty drugmaker Amicus Therapeutics, Inc. has decided to spend as much as $200 million on a new production facility in the U.S. instead of Europe.
At Amicus Therapeutics, the new tax law solved a geographic dilemma. The Cranbury, N.J., company is developing an experimental drug to treat Pompe disease, a rare inherited disorder that causes muscle weakness and can be fatal.
After early results for a new drug proved promising, Amicus wanted to increase production for further clinical testing and potential commercial sales.
Amicus, which has been using Chinese contract manufacturer WuXi Biologics to supply the drug, decided in August to build its own facility. The U.S. was at a disadvantage to Europe, due to its 35% statutory federal income-tax rate for companies. Ireland’s corporate tax rate, by contrast, is 12.5%.
Those financial considerations threatened to overshadow other advantages that a U.S. plant would offer, including the ease with which company officials could visit it, and the availability of talented workers in some regions.
“Our strong assumption was that it would be very challenging to establish a new bio-manufacturing facility in the U.S.,” Chief Executive John Crowley said in an interview.
As the tax legislation advanced in Congress last fall, however, building in the U.S. began to look more attractive. On Dec. 21, a day after Congress passed the final measure, which lowered the statutory corporate rate to 21%, Mr. Crowley recommended to his board the company focus on finding a U.S. site. The company has narrowed its choice to three East Coast cities Mr. Crowley declined to identify, and expects to decide in the next month or two. It expects the plant to cost $150 million to $200 million, and to employ at least 200 people at an average pay of $100,000 a year.
“With the changes in the tax law, it now makes the U.S. competitive with these geographies we’re looking at,” he said. – Jan. 26, 2018 Wall Street Journal article excerpt
Somerset Savings Bank (Bound Brook, New Jersey) — $750 bonuses for employees excluding senior management:
Somerset Savings Bank announced today that, following the enactment of the new federal tax reform legislation, it will distribute a special cash bonus to its employees. Every employee, excluding senior management, will receive a one-time $750 bonus. – Jan. 23, 2018 Somerset Savings Bank press release
OceanFirst Financial Corp. (Toms River, New Jersey) – base wage increase to $15 per hour:
OceanFirst Financial Corp. (NASDAQ:OCFC) the holding company for OceanFirst Bank, today announced a commitment to increase the Bank’s minimum hourly pay rate to $15.00 within 30 days of the enactment of the Tax Cuts and Jobs Act which has been approved by Congress and is expected to be signed into law in the near future.” — Dec. 22, 2017 OceanFirst Financial Corp. press release
Invertase Brewing Co. (Phillipsburg, New Jersey) — A brewery is being built in an Opportunity Zone created by the Tax Cuts and Jobs Act:
A piece of paper taped to the door blocks the view inside. “No peeking!!” it says. There are smiley faces inside the O and under the two exclamation points.
Inside is where Stephen and Karen Zolnay are hard at work turning a family hobby of 15 years into a business.
When finished, Invertase Brewing Co. will be one of just a handful of breweries in northwest New Jersey, and the only one in Phillipsburg. Breweries are more plentiful just across the Delaware River in Easton, a community from which the Zolnays hope to draw support.
What’s more, they said, the site is at a crucial intersection for Route 22 motorists getting to and from the free bridge and falls within an federal opportunity zone, giving them some economic incentive as well. — July 21, 2019 Hunterdon County Democrat article
JLL Capital Markets (Jersey City, New Jersey) — The company is investing in a brand new apartment complex, which will create new jobs:
“JLL Capital Markets has arranged a $20.5 million loan for an investment fund that’s buying a Jersey City apartment complex, NJBIZ reported. Borrower Normandy Opportunity Zone Fund, which is managed by Columbia Property Trust, plans to use the financing to purchase the 93-unit, six-story building known as The Ashton, which is in an opportunity zone. The building houses 62 parking spots, according to the outlet. Rialto Capital Management provided the two-year, floating rate loan. ” — February 26, 2020 The Real Deal article
JLL Capital (Jersey City, New Jersey) — The company announced it is building an apartment community located in an Opportunity Zone created by the Tax Cuts and Jobs Act:
JLL Capital Markets announced today that it has arranged $41 million in acquisition financing for BELA, a newly developed, 104-unit, luxury apartment community located within a qualified opportunity zone in Jersey City’s rapidly expanding Bergen-Lafayette neighborhood.
JLL worked on behalf of the borrower, Golden Glades Capital Management, to arrange the two-year, floating-rate loan that was provided by Ares Commercial Real Estate Corporation (NYSE: ACRE). — April 2, 2020 MultifamilyBiz article
Advanced Sciences and Technologies, LLC (Berlin, New Jersey) – increased 401(k) match for employees.
Unity Bank (Clinton, New Jersey) – all 200 non-executive employees will receive a $750 bonus:
In response to Congressional approval of tax reform legislation, Unity Bancorp, Inc. (NASDAQ:UNTY), parent company of Unity Bank, announced today that its Board of Directors has elected to provide all employees excluding executive management with a one-time $750 bonus.
“The bank’s Board and executive management felt strongly that the anticipated benefit of the corporate tax rate reduction should be shared with our employees,” said Unity Bank President & CEO James A. Hughes. “Unity’s employees constantly demonstrate their commitment to our customers and the community, not only in their work responsibilities, but by donating their personal time and resources to benefit those in need. We foster an entrepreneurial culture at Unity where the employees and bank can grow together and this decision fits perfectly with that philosophy.”
The corporate tax rate in the recently passed legislation will drop from 35% to 21%. Unity Bank intends to pay the bonuses to its approximately 200 employees in January. – Dec. 26, 2017 Unity Bancorp Inc. press release
Amboy Bank (Old Bridge, New Jersey) – Base wage raised to $15 per hour; $1,000 bonuses for non-executive employees:
The New Jersey Bankers Association said Amboy Bank was “sharing the benefits of the recent tax reform.”
“They are joining the growing group of banks across New Jersey and the country that are rewarding employees with increased wages, special bonuses and enhanced benefits programs as well as increased funding for charitable giving,” president and CEO John E. McWeeney, Jr. said in a statement. – Feb. 8, 2018 NJ Advance Media article excerpt
Apple (There are 12 Apple stores in New Jersey: Atlantic City, Bridgewater, Cherry Hill, Edison, Freehold, Lawrence Township, Marlton, Paramus, Rockaway, Short Hills, Wayne, Woodcliff Lake) — $2,500 employee bonuses in the form of restricted stock units; nationally, $30 billion in additional capital expenditures.
Johnson & Johnson (New Brunswick, New Jersey) – New investments due to tax reform – details will be released in April.
“Now regarding tax reform, what we said from the very beginning is that one of the major reasons, in addition to lowering the rate, is just frankly the flexibility that it provides us, and we think it actually helps make us more competitive, particularly on an international level if we happen to be in a competitive situation with other companies because now we have greater flexibility on how we can access that cash. So we think net-net, it’s a positive for us. As you heard Dominic [J&J CFO] mention earlier, regarding the more immediate tax reform impact, we think that the — the wise thing to do is to invest a good portion of that back into R&D. If you look over the past several years, the output, the productivity, particularly in our pharmaceutical pipeline, but also in others of our investments in R&D, we think, have been at the high end. And we think ultimately doing that, we’ll have the greatest impact on our business, will help us get out to better serve underserved needs around the globe, and that’s where we’re heading in that direction.” – CEO Alex Gorsky
“We are pleased by the final passage of the U.S. tax cuts and jobs act.” – CFO Dominic Caruso
Bank of America (Multiple locations in New Jersey) — New Jersey-based employees of Bank of America will receive $1,000 bonuses.
Cintas Corporation (Multiple locations in New Jersey) — $1,000 bonuses for employees of at least a year, $500 bonuses for employees of less than a year.
Chipotle Mexican Grill (Multiple locations in New Jersey) – Bonuses ranging from $250 to $1,000; increased employee benefits; nationally, $50 million investment in existing restaurants.
Comcast (Multiple locations in New Jersey) — $1,000 bonuses; nationally, at least $50 billion investment in infrastructure in next five years.
Home Depot — 72 locations in New Jersey, bonuses for all hourly employees, up to $1,000
Lowe’s — 5,000 employees at 39 stores and two distribution centers in New Jersey. Employees will receive bonuses of up to $1,000 based on length of service; expanded benefits and maternity/parental leave; $5,000 of adoption assistance.
Ryder (13 locations in New Jersey) – Tax reform bonuses for employees.
Starbucks Coffee Company (Multiple locations in New Jersey) – $500 stock grants for all retail employees, $2,000 stock grants for store managers, and varying plan and support center employee stock grants. Nationally, 8,000 new retail jobs; an additional wage increase this year, totaling approximately $120 million in wage increases, increased sick time benefits and parental leave.
T.J. Maxx – 39 stores in New Jersey – tax reform bonuses, retirement plan contributions, parental leave, enhanced vacation benefits, and charitable donations:
The 2017 Tax Act benefited the Company in the fourth quarter and full year Fiscal 2018. The Company expects to continue to benefit from the 2017 Tax Act going forward, primarily due to the lower U.S. corporate income tax rate. As a result of the estimated cash benefit related to the 2017 Tax Act, the Company is taking the following actions:
A one-time, discretionary bonus to eligible, non-bonus-plan Associates, globally
An incremental contribution to the Company’s defined contribution retirement plans for eligible Associates in the U.S. and internationally
Instituting paid parental leave for eligible Associates in the U.S.
Enhancing vacation benefits for certain U.S. Associates
Made meaningful contributions to TJX’s charitable foundations around the world to further support TJX’s charitable giving. – Feb. 28, 2018 The TJX Companies Inc. press release excerpt
U-Haul (Multiple locations in New Jersey) – $1,200 bonuses for full-time employees, $500 for part-time employees.
Wal-Mart – 63 locations in New Jersey — Base wage increase for all hourly employees to $11; bonuses of up to $1,000; expanded maternity and parental leave; $5,000 for adoption expenses.
Wells Fargo – 279 locations in New Jersey; raised base wage from $13.50 to $15.00 per hour; nationally, $400 million in charitable donations for 2018; $100 million increased capital investment over the next three years.
Note: If you know of other New Jersey examples, please email John Kartch at [email protected]
The running nationwide list of companies can be found at www.atr.org/list