S258

An Act providing a corporation business tax credit and a gross income tax deduction for the purchase of certain vehicles, and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and Title 54A of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. (1) For the first privilege period beginning on or after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), a taxpayer shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for the amount paid during the privilege period to purchase an electric vehicle or plug-in hybrid electric vehicle which is used directly and exclusively by the taxpayer in the taxpayer’s business, trade, or occupation. The credit allowed pursuant to this paragraph shall be in the amount of $5,000 for the purchase of an electric vehicle or $3,000 for the purchase of a plug-in hybrid electric vehicle.

(2) For the second privilege period beginning on or after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), a taxpayer shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for the amount paid during the privilege period to purchase an electric vehicle or plug-in hybrid electric vehicle which is used directly and exclusively by the taxpayer in the taxpayer’s business, trade, or occupation. The credit allowed pursuant to this paragraph shall be in the amount of $3,000 for the purchase of an electric vehicle or $1,500 for the purchase of a plug-in hybrid electric vehicle.

(3) For the third privilege period beginning on or after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), a taxpayer shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for the amount paid during the privilege period to purchase an electric vehicle or plug-in hybrid electric vehicle which is used directly and exclusively by the taxpayer in the taxpayer’s business, trade, or occupation. The credit allowed pursuant to this paragraph shall be in the amount of $2,000 for the purchase of an electric vehicle or $1,000 for the purchase of a plug-in hybrid electric vehicle.

b. (1) To qualify for the tax credit allowed pursuant to this section, the taxpayer shall file an application for a certification from the Commissioner of Environmental Protection that the electric vehicle or plug-in hybrid electric vehicle purchased by the taxpayer qualifies for the tax credit provided by this section, and is used directly and exclusively by the taxpayer in that taxpayer’s business, trade, or occupation. The certification shall specifically indicate the date of purchase of the vehicle, a description of the vehicle, a description of how the vehicle is used in the taxpayer’s business, trade, or occupation, and the amount paid for the vehicle. The commissioner shall prescribe the form for the application and certification.

(2) The Commissioner of Environmental Protection shall have 90 days from the date of receipt of a complete application to make a determination as to the issuance of a certification.

(3) Upon certification, the Commissioner of Environmental Protection shall submit a copy thereof to the taxpayer and the director. In filing a tax return that includes a claim for the credit allowed pursuant to this section, the taxpayer shall include a copy of the certification.

c. No credit shall be allowed pursuant to this section for an electric vehicle or plug-in hybrid electric vehicle purchased after the conclusion of the first three privilege periods following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill).

d. The amount of the credit applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162, for a privilege period, when taken together with any other credits allowed against the tax imposed pursuant to section 5 of P.L.1945, c.162, shall not exceed 50% of the tax liability otherwise due and shall not reduce the tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162. The priority in which credits allowed pursuant to this section and any other credits shall be taken shall be as determined by the Director of the Division of Taxation. The amount of the credit otherwise allowable under this section which cannot be applied for the privilege period due to the limitations of this subsection or under other provisions of P.L.1945, c.162 may be carried over, if necessary, to the seven privilege periods following the privilege period for which the credit was allowed.

e. As used in this section:

“Electric vehicle” means an on-road motor vehicle that uses a battery to store the electrical energy to power the vehicle’s motor, including a battery electric vehicle, and that is charged or recharged from an external source of electricity, such as by plugging the vehicle into an electric power source. An electric vehicle may qualify as a “zero emission vehicle” pursuant to P.L.2003, c.266 (C.26:2C-8.15 et seq.) but shall not include a hybrid electric vehicle.

“Hybrid electric vehicle” means an on-road vehicle powered by conventional or alternative fuels as well as electric power stored in a battery, and the battery is charged through regenerative braking and the internal combustion engine and is not plugged in to charge.

“Plug-in hybrid electric vehicle” means an on-road electric vehicle that is charged or recharged by plugging the vehicle into an electric power source and may also be powered by conventional or alternative fuels in addition to electric power stored in a battery.

2. a. (1) For the first privilege period beginning on or after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), a taxpayer shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for the amount paid during the privilege period to purchase an electric truck or electric bus which is used directly and exclusively by the taxpayer in the taxpayer’s business, trade, or occupation. The credit allowed pursuant to this paragraph shall be in the amount of up to $20,000 for the purchase of an electric truck or electric bus.

(2) For the second privilege period beginning on or after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), a taxpayer shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for the amount paid during the privilege period to purchase an electric truck or electric bus which is used directly and exclusively by the taxpayer in the taxpayer’s business, trade, or occupation. The credit allowed pursuant to this paragraph shall be in the amount of up to $15,000 for the purchase of an electric truck or electric bus.

(3) For the third privilege period beginning on or after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), a taxpayer shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for the amount paid during the privilege period to purchase an electric truck or electric bus which is used directly and exclusively by the taxpayer in the taxpayer’s business, trade, or occupation. The credit allowed pursuant to this paragraph shall be in the amount of up to $10,000 for the purchase of an electric truck or electric bus.

b. (1) To qualify for the tax credit allowed pursuant to this section, the taxpayer shall file an application for a certification from the Commissioner of Environmental Protection that the electric truck or electric bus purchased by the taxpayer qualifies for the tax credit provided by this section, and is used directly and exclusively by the taxpayer in that taxpayer’s business, trade, or occupation. The certification shall specifically indicate the date of purchase of the vehicle, a description of the vehicle, a description of how the vehicle is used in the taxpayer’s business, trade, or occupation, and the amount paid for the vehicle. The commissioner shall prescribe the form for the application and certification.

(2) The Commissioner of Environmental Protection shall have 90 days from the date of receipt of a complete application to make a determination as to the issuance of a certification.

c. No credit shall be allowed pursuant to this section for an electric truck or electric bus purchased after the conclusion of the first three privilege periods following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill).

e. As used in this section:

“Electric bus” means a bus powered by electricity, or powered by a combination of internal combustion engines and electric propulsion, that is charged or recharged from an external source of electricity, such as by plugging the bus into an electric power source.

“Electric truck” means a truck powered by electricity, or powered by a combination of internal combustion engines and electric propulsion, that is charged or recharged from an external source of electricity, such as by plugging the truck into an electric power source. An electric truck may include a truck with electrically powered accessories, instead of mechanically powered accessories, that rely on electrical power to operate independently of the engine.

3. a. (1) For the first taxable year beginning on or after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), a taxpayer shall be allowed to deduct from gross income an amount paid by the taxpayer during that taxable year to purchase an electric vehicle or plug-in hybrid electric vehicle. A taxpayer shall be allowed to deduct from gross income $5,000 towards the purchase of one electric vehicle or $3,000 towards the purchase of one plug-in hybrid electric vehicle in the first taxable year after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill). In the case of individual taxpayers filing a joint return as a married or civil union couple, they shall be allowed to deduct from gross income $5,000 towards the purchase of one electric vehicle, or $3,000 towards the purchase of one plug-in hybrid electric vehicle, per individual in the first taxable year after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill).

(2) For the second taxable year beginning on or after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), a taxpayer shall be allowed to deduct from gross income an amount paid by the taxpayer during that taxable year to purchase an electric vehicle or plug-in hybrid electric vehicle. A taxpayer shall be allowed to deduct from gross income $3,000 towards the purchase of one electric vehicle or $1,500 towards the purchase of one plug-in hybrid electric vehicle in the second taxable year after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill). In the case of individual taxpayers filing a joint return as a married or civil union couple, they shall be allowed to deduct from gross income $3,000 towards the purchase of one electric vehicle, or $1,500 towards the purchase of one plug-in hybrid electric vehicle, per individual in the second taxable year after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill).

(3) For the third taxable year beginning on or after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), a taxpayer shall be allowed to deduct from gross income an amount paid by the taxpayer during that taxable year to purchase an electric vehicle or plug-in hybrid electric vehicle. A taxpayer shall be allowed to deduct from gross income $2,000 towards the purchase of one electric vehicle or $1,000 towards the purchase of one plug-in hybrid electric vehicle in the third taxable year after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill). In the case of individual taxpayers filing a joint return as a married or civil union couple, they shall be allowed to deduct from gross income $2,000 towards the purchase of one electric vehicle, or $1,000 towards the purchase of one plug-in hybrid electric vehicle, per individual in the third taxable year after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill).

b. No deduction shall be allowed pursuant to this section for an electric vehicle or plug-in hybrid electric vehicle purchased after the conclusion of the first three taxable years beginning on or after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill).

c. As used in this section:

4. This act shall take effect immediately and apply to amounts paid in the first three tax years beginning on or after the date of enactment of this act.

STATEMENT

This bill would provide a corporation business tax credit and allow a gross income tax deduction for the purchase of an electric vehicle (EV) or plug-in hybrid electric vehicle (PHEV) and a corporation business tax credit for the purchase of an electric truck or electric bus. The tax credits and deductions would become effective at the next taxable year beginning on or after the date of enactment of this bill into law. The credit and deduction provided by the bill would be available for the first three tax years following the date of enactment; no credit or deduction would be provided for EVs, PHEVs, or electric trucks or buses purchased after the conclusion of the first three tax years occurring on or after the date of enactment.

In order to qualify for the credit under the corporation business tax, the EV or PHEV must be used directly and exclusively by the taxpayer in the taxpayer’s business, trade, or occupation. For vehicles purchased in the first taxable year occurring on or after the date of enactment of this bill into law, a taxpayer would be allowed a credit in an amount of $5,000 for an EV or $3,000 for a PHEV; for vehicles purchased in the second year the credit is allowed, in an amount of $3,000 for an EV or $1,500 for a PHEV; and for vehicles purchased in the third year the credit is allowed, in an amount of $2,000 for an EV or $1,000 for a PHEV. To qualify for the corporation business tax credit, the taxpayer would need to file an application for a certification from the Commissioner of Environmental Protection that the EV or PHEV purchased by the taxpayer qualifies for the tax credit, and is used directly and exclusively by the taxpayer in that taxpayer’s business, trade, or occupation.

For electric trucks or electric buses purchased in the first taxable year occurring on or after the date of enactment of this bill into law, a taxpayer would be allowed a credit in an amount of up to $20,000; for electric trucks or buses purchased in the second year the credit is allowed, in an amount up to $15,000; and for electric trucks or buses purchased in the third year the credit is allowed, in an amount of up to $10,000. To qualify for the corporation business tax credit, the taxpayer would need to file an application for a certification from the Commissioner of Environmental Protection that the electric truck or bus purchased by the taxpayer qualifies for the tax credit, and is used directly and exclusively by the taxpayer in that taxpayer’s business, trade, or occupation.

The gross income tax deduction provides that for the first tax year occurring on or after the date of enactment of this bill into law, a taxpayer would be allowed a gross income tax deduction of $5,000 for the purchase of one EV or $3,000 for the purchase of one PHEV. For the second tax year, a taxpayer would be allowed a gross income tax deduction of $3,000 for the purchase of one EV or $1,500 for the purchase of one PHEV, and for the third tax year, a taxpayer would be allowed a gross income tax deduction of $2,000 for the purchase of one EV or $1,000 for the purchase of one PHEV. The bill also provides deduction allowances in the case of individual taxpayers filing a joint return as a married or civil union couple.

The promotion of electric vehicles and hybrid electric vehicles, and the infrastructure needed to recharge them, would serve to reduce the purchase of foreign petroleum that supports an estimated 75 billion on-road vehicle miles traveled annually in the State. New Jersey citizens, businesses and institutions pay billions of dollars each year to foreign oil suppliers for the gasoline and diesel fuels needed for that travel.