Pilot tax program nj

Upon the completion of the term of the agreement, the property than reverts to being subject to overall property taxes. If the developer is considering participating in a PILOT program, the developer should first engage an experienced attorney to help with drafting of the PILOT agreement as well as work with a consultant to help establish the rates that will be included in the applicable agreement.

In addition, the developer will be subject to certain reporting provisions within the PILOT agreement. This will include:. These items are relevant, as the municipality will rely on this information from the audited financial statements to ensure the gross revenue test and allowable net profit calculation and related payments made by the developer are appropriate.

The developer and the municipality should ensure they have a full understanding of all of the reporting provisions within the applicable PILOT agreement, as these arrangements can be mutually beneficial to both parties. Christopher Stoop is a Senior Audit Manager who serves both public and private companies and his client base focuses on the real estate, construction, manufacturing, distribution, retail and life sciences industries.

The entities falling under the EisnerAmper brand are independently owned and are not liable for the services provided by any other entity providing services under the EisnerAmper brand. Skip to nav Skip to content. This program was created to benefit environmental quality, quality of life, and economic health in New Jersey by conserving open space for natural resources and recreational purposes.

While this program has been amended throughout its tenure, it is a noteworthy example of a state program that creates incentives for local governments to create open space by mitigating the impacts of lost tax revenue and land maintenance costs. In a managed retreat context, a similar program could be coupled with hazard mitigation buyouts and open space acquisitions to encourage local governments to conserve vulnerable properties impacted by sea-level rise and flooding.

The PILOT Program was created to conserve New Jersey's opportunities for outdoor recreation, education, and relaxation for present and future generations. The New Jersey legislature recognized that open spaces were being lost to development and that the costs of protecting and maintaining open space land could economically burden local governments.

The PILOT Program offset the economic burden of lost tax revenue upon local governments while helping them attain the multiple benefits of open space conservation. Specifically, the legislature found that open space conservation supports local economies, helps protect and restore imperiled species, and supports good ecosystem health generally.

It could also be based on a percentage of total project costs. Correspondingly, another calculation that is performed annually is an excess profits calculation, which limits the amount of profits that an entity is able to generate.

The calculation takes the yearly gross revenue as defined by the Law less all operating and non-operating expenses—including those related to debt service. The calculation is also cumulative, so if you have large losses in the first years, you can use these to offset gains in future years as part of the calculation.

Generally, audits are due 90 days after year end. Also as part of the application process we can assist reviewing the financial agreements up front during the negotiation of agreements to help developers avoid common known mistakes and assist with the putting together the fiscal plan which must be submitted with the financial agreement. Alexander J. Reach him at anarcise wiss. Michael Kroll, CPA , is a Director in the Real Estate Services Group, specializing in performing a mix of audits, reviews and compilations as well as providing tax services for his clients.

If you would like to speak with Michael, you may reach him at mkroll wiss.