NJ "Impact Fee" On Commercial Projects?!?!

cburke501

I was just told by one of the owners of our company that NJ has passed a 2.5% "Impact Fee" on commercial projects ongoing, and in the future. Has anyone else heard this yet?

We are renovating/adding to an old building to put up our offices, showrooms and also rental space, and now we're going to be taxed 2.5% of the total cost of the addition. For who, for what? We have been paying property taxes on the lot, keeping carpenters working, and will help create jobs when the building is finished.

This is just one more reason I think NJ does not want people to do business here. Imagine Donald trump builds a new billion dollar casino. He's paying 2.5% on that construction, despite the fact that he's bringing in tons of tax, creating jobs and bringing tourism to the state.

Is anyone else thinking contractors revolution?

Carport King

Don't you just love guys like me that tells it like it is?

Oh well how would like to pay impact fees on everything you build? Houses,commerical,manufactured homes you name it.

They use are impact fees for upkeeping roads and building more county parks and sidewalks etc. And by the way 2.5% is a piece of cake compared to ours.

They also use this fee to slow building down.They just raise the fee up where you can not afford to build a building.

Just for a regular house you will spend $10-15,000 just for permits and impact fees.

If you are like Trump he will not pay impact fees because it is the art of the deal and the man is a master at it. So wipe your eyes and get out your checkbook and add it to the cost of doing business. Priceless.

thom

We've had impact fees forever. Construction affect everything. Roads need widening, traffic lights need to be installed, sewer and water pipes need to be extended and enlarged, more schools need to be built, more police need to be trained and stations built, etc. These are all costs directly related to the construction of buildings. Someone must pay.

Snow Man

Pass it along with the fuel surcharge is all you can do.

Corzine , just one look at him makes me cringe.

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cburke501

I completely understand the impact fee on residential developments. My father was in that business for years and they always dealt with it. In that case, the new housing adds kids to the school, cans to the trash route, and extra mailboxes. That I get.

My problem is that Nj is now adding it to COMMERCIAL construction, and more importantly to projects that have already started. Our building is halfway done and we find out we'll have an extra 2.5% to pay.

Nearby theres an LA fitness in the site work stage thats probably worth $4 million. They didn't plan for this 2.5% because none of us knew about it. They're getting hammered much worse than we are. I guess my argument is that these commercial projects are an overall benefit to the community, not a burden, and that eventually people will stop trying to improve these communities if the taxes keep escalating this way.

Mike Finley

The same arguments could be made substituting residential for commercial in what you said.

However, I am on your side. But you know what? It's F&*King NEW JERSEY!!!!! You're on the east coast smack dab in the middle of the TAX CENTRAL. I won't even begin to blow you mind if I started comparing taxes out there to the West you wouldn't believe it if I told you, it would sound like a fantasy. Doesn't suprise me in the least, I'm just shocked somebody out there hasn't figured out how to tax you on the 2.5% tax you are payint!!!!

Living out there I recall the NY state thru way toll road, was supposed to only be a toll road until it was paid for. I think everybody gave up on waiting for that to happen.

Tom R

I live in Jersey and you have to try and look at the bright side.

The more people move out 'cuz they can't afford to live here, - - the richer your new customer base becomes . . .

G&S23

I don't think that tax would hold up in a court of law- then again I'm not on the East Coast and I'm not a lawyer.

BTW, Tom R, I like the way you think.

cburke501

I just found out that this 'Impact Fee' is actually being used by NJ for low income housing. Awesome.

TimNJ

Yup, all the po' folks who only make $50,000 need a place to live too
Read in the paper today NJ is second highest income in the nation again, MD is #1.

concretemasonry

If you are only concerned about a single impact fee of 2.5% affecting a project, do not worry about. Builders and developers always a build-in contingencies in the budget. It is recognized when a project is proposed/estimated and it takes much more than that to effect the future of a project and could just be a negotiating ploy.

Most business people (devlopers, builders and contractors) do not know within 2.5% what the actual cost will be, so they always add for unknowns at the time of proceeding or bidding.

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Dick

Engineer, designer and consultant recently active domestically and internationally on construction and design in about 35 countries.

cburke501

concretemasonry, I understand that for projects in the future. My issue is that we are the GC and the customer on this job, as we're renovating this building for our offices and showroom,as well as rental space. So when we estimated the cost last year we had noo idea they would railroad this tax in on us. Its just typical NJ crap to enforce a tax so quickly and on projects that have already started. They're unbelievably quick getting their money, while we're still waiting for $5,000 from last year on a government project we worked on. I think I'm gonna go live in a teepee in New Mexico.

concretemasonry

I can't blame you after having spent a lot of time in the region and having many friends in the construction and concrete materials business there (NJ, eastern PA), but never had to work there. - My wife grew up in Philly/Trenton area after being born in Lewisberg. It is a unique way of doing business and thinking. - After living elsewhere, she enjoys going back, but is glad she does not live there.

An after the fact tax does not sound right. Were the contract documents normal or were they slightly different since someone knew about the tax and wanted to push it off to others?

__________________
Dick

Engineer, designer and consultant recently active domestically and internationally on construction and design in about 35 countries.