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Newark Lures Amazon With $1 Billion Payroll Tax Incentive

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Newark City Council today approved a $1 billion payroll tax exemption for companies such as Amazon. July 11, 2018. Credits: Rebecca Panico
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NEWARK, NJ - Amazon will get a payroll tax break at a cost of $1 billion to the city should the company open its second headquarters here.

It’s one of two ordinances that were approved by the Newark City Council council to sweeten the deal for the corporate giant and stand out among other locations vying for Amazon’s so-called HQ2.

“The City Council has brought Newark a giant step closer to being Amazon’s choice for HQ2,” said Mayor Ras Baraka in a statement. “The creation of 12,500 jobs for Newark residents, the added revenue to Newark families plus the added revenue to the City of Newark, Newark Public Schools and Newark Public Library make HQ2 a game changer in the transformation of our city.”

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The ordinances that were passed today do not explicitly name Amazon, but instead refer to headquartered companies that intend to create over 30,000 new full-time jobs and make $3 billion in capital investments.

For an employee that does not reside in the city, Amazon would pay 50 percent on the 1 percent payroll tax, while employees who reside in the city would be totally exempt. The payroll tax incentive would be capped at $1 billion, the ordinance reads.

Another ordinance would streamline the process of land-use and permit approvals for large companies such as Amazon once Gov. Phil Murphy creates a new “Office of Transformative Projects.”

Once that office is created, the city intends to designate the Downtown area as an Urban Growth Zone. The state's Economic Development Authority would then be able to provide financial assistance to projects in those zones and be exempt from the requirements of local regulations.

“I am proud to stand by the strong leadership of Mayor Baraka and all who are speaking in a clear and unified voice that Newark is ready to lead and win the Amazon bid,” Murphy said in a statement. “Let there be no doubt: we are all in this together and Newark will continue to rise as one.”

Council President Mildred Crump was absent from today's meeting, but Council Vice President Luis Quintana said after the meeting that incentives were necessary to make sure Amazon chooses Newark for HQ2. 

"We need to get Amazon here," said Quintana after the meeting "We have to create jobs." 

A third ordinance that’s slated for approval would provide a $10,000 corporate business tax credit for 10 years for each employee hired, city spokesman Frank Baraff said.

A special city council meeting is slated for Tuesday at 10 a.m., said Quintana, though it's not clear if the third tax incentive will be approved then. 

This article has been updated. 

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