What is the New Jersey Manufacturing Voucher Program (MVP)?

A welcome development for NJ manufacturers, the New Jersey Manufacturing Voucher Program (MVP) is a program aimed at supporting the manufacturing industry in the state.

The program provides funding assistance to New Jersey manufacturers for eligible projects ranging from $5,000 to $250,000, with the goal of helping manufacturers modernize and expand their operations, increase efficiency and competitiveness, and create new jobs.

With a $20 million budget, the MVP further aims to address the challenges faced by the manufacturing sector in New Jersey. Launched and administered by the New Jersey Economic Development Authority (NJEDA), which has partnered with the New Jersey Manufacturing Extension Program (NJMEP), the MVP will provide technical assistance to participating businesses.

NJ Governor Phil Murphy said the program will “strengthen and modernize New Jersey’s manufacturing industry while creating good-paying, middle-class jobs.”

The MVP is expected to have a significant impact on the manufacturing sector in New Jersey, helping to create new jobs, retain existing jobs, stimulate economic growth in the state, and support the modernization and expansion of manufacturing businesses, ensuring New Jersey remains a leader in the advanced manufacturing landscape.

Who will benefit from the Manufacturing Voucher Program in New Jersey?

The MVP is designed to support small and medium-sized New Jersey manufacturers struggling to sustain their operations, expand their production capabilities, and create new jobs.

The program offers funding to eligible businesses to cover the costs of various activities related to business growth, such as equipment purchases and workforce or supply chain development, the implementation of new technology or employee training protocols, or even marketing.

By assisting businesses that have struggled to grow due to financial constraints, the MVP will enable New Jersey manufacturers to make the investments necessary to take their businesses to the next level, increase their competitiveness, and access new markets and customers.

It’s also worth noting that the MVP is not exclusively targeted at the manufacturing sector. According to NJEDA CEO Tim Sullivan, the program will also target the following industries:

  • Advanced Logistics
  • Advanced Transportation
  • Autonomous Vehicle Research and Development
  • Aviation
  • Clean Energy
  • Film and Digital Media
  • Finance and Insurance
  • Hemp Processing
  • High Technology
  • Information Technology
  • Life Sciences
  • Non-Retail Food and Beverage
  • Professional Services
  • Zero-Emission Vehicle Research or Development

Who is eligible for the NJ MVP?

Unfortunately, not all manufacturers are eligible for this program.

The New Jersey Economic Development Authority (NJEDA) has set specific eligibility criteria for applicants.

For example, to be eligible for the program, businesses must:

  • Have a physical location in New Jersey
  • Employ between 10 and 50 full-time employees
  • Have annual revenues between $1 million and $20 million
  • Be in good standing with the state
  • Not be delinquent on any taxes or fees
  • Be in good standing with the NJ Department of Labor and Workforce Development, the NJ Department of Environmental Protection, and the NJ Division of Taxation at the time of approval

Additionally, while the grant program provides funding for equipment purchases, the equipment – both new or used – must be located and installed at a New Jersey location and used in the manufacturing process.

Furthermore, the grant amount will be up to 50% of the total project cost, with a maximum grant amount of $100,000 per project, and the aggregated project cost, including equipment and installation, must be at least $25,000.

Finally, all equipment installation contracts (including manufacturer/supplier agreements) totaling over $2,000 are subject to Prevailing Wage Act rates, which sets a wage by law for workers engaged in public works projects to protect the worker’s well-being and safeguard their employers from the adverse effects of unfair competition.

How can businesses apply for the New Jersey Manufacturing Voucher Program?

The application process for the Manufacturing Voucher Program involves a pre-qualification stage and a full application stage.

During the pre-qualification stage, businesses must provide basic information about their operations, including revenues, employment numbers, and business activities. The NJEDA will review the pre-qualification application to determine if the business is eligible to move on to the full application stage.

If a business is deemed eligible, it can move on to the full application stage.

During this stage, the business will need to provide more detailed information about its operations and how it plans to use the funds provided by the program. For example, applicants must provide a purchase quote, order proforma, and/or an equipment listing and obtain a tax clearance certificate.

The grant application must be submitted, reviewed, and approved by the NJEDA and the NJMEP before signing a contract, placing a purchase order, making a deposit, or making any other type of commitment related to the project to be eligible for the grant program.

Applications are accepted on a rolling basis until all funds are committed.

What are the tax implications of the New Jersey MVP?

It’s important to note that the New Jersey Manufacturing Voucher Program (MVP) is a pilot program. To fully understand any potential tax implications for your business of receiving such a grant, we highly recommend consulting with tax professionals (like us!) to ensure you comply with all applicable tax laws and regulations related to the MVP.

However, and speaking only broadly, COVID-related grants are generally not considered taxable income in New Jersey. They should not be reported as income on the New Jersey Gross Income Tax and Corporation Business Tax returns.

Concerning other types of grants not providing COVID relief, there is no specific category of taxable income that such grants would fall into under New Jersey Gross Income Tax, so these grants are also generally not taxable and, in many cases, needn’t be reported as income on a New Jersey Gross Income Tax return.

For Corporation Business Tax, if the other types of grants not providing COVID relief are included in federal taxable income, they are included in the entire net income pursuant to NJSA 54:10A-4(k) and should be reported as income on a New Jersey Corporation Business Tax return.

There may be other tax implications that vary depending on the individual circumstances of your business. As always, speaking to a tax professional is the only way to be sure.

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