Bill > S2471

This bill prohibits companies that are considered "inverted domestic corporations," meaning they have been determined to be such by the U.S. Department of the Treasury or the Internal Revenue Service, from receiving state contracts or development subsidies. This prohibition applies to contracts for goods, services, or construction paid for with state funds, and also to development subsidies, which are financial assistance provided by the state to encourage economic development. Companies seeking these benefits must certify they are not inverted domestic corporations, and those barred from federal contracts for this reason will automatically be considered inverted domestic corporations in New Jersey. The bill also amends existing law regarding development subsidies to require applicants to certify their status and to mandate that recipients provide annual updates on their legal status, with penalties including repayment of the subsidy if they later become an inverted domestic corporation. These provisions are intended to prevent companies from artificially shifting their tax residency overseas to avoid U.S. taxes while still benefiting from state resources, but they will not be applied if doing so would violate federal law or jeopardize federal funding.