Sponsored by:
Senator JIM WHELAN
District 2 (Atlantic)
Senator JOSEPH M. KYRILLOS, JR.
District 13 (Monmouth)
Co-Sponsored by:
Senators Gordon and Van Drew
SYNOPSIS
Provides certain small businesses impacted by Hurricane Sandy a corporation business tax or gross income tax credit for certain reinvestment in Shore municipalities.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act providing certain small businesses impacted by Hurricane Sandy a corporation business tax or gross income tax credit for certain reinvestment in Shore municipalities, supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and N.J.S.54A:1-1 et seq.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A taxpayer that is a small business having a business location in a shore municipality whose business property at that location was destroyed, damaged, or lost as a result of wind, flooding, or other storm conditions caused by or attributable to Hurricane Sandy shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to the amount of reinvestment in business property located in that same municipality in excess of the amount of its reimbursed business property loss, subject to the limitations of this section.
b. The total amount of tax credits allowed pursuant to this section and section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall not exceed the least of:
(1) the unreimbursed business property loss of the business at the business location in the shore municipality;
(2) the amount of reinvestment made by the business at the business location in the shore municipality in excess of the reimbursed property loss at that location; or
(3) $100,000.
c. The tax credit shall be allowed for reinvestment placed in service in the shore municipality within two years following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) and shall be claimed for the privilege period of the taxpayer first following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) or the privilege period in which the reinvestment takes place. The amount of the credit applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), 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 (C.54:10A-5), 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 (C.54:10A-5). The priority in which tax credits allowed pursuant to this section and any other tax credits shall be taken shall be determined by the director. The amount of the tax credit allowable pursuant to this section which cannot be applied for the privilege period due to the limitations of this subsection may be carried over, if necessary, to the seven privilege periods following the privilege period for which the tax credit was allowed.
d. As used in this section:
“Shore municipality” means a municipality in this State bordering on the Atlantic Ocean or Delaware Bay.
“Business property” means real property used in the taxpayer’s business, such as business structures and fixtures, and tangible personal property used in the taxpayer’s business, such as supplies, inventory, and equipment.
“Full-time employee” means an employee working for the taxpayer for at least 140 hours per month at a wage not less than the State or federal minimum wage, if either minimum wage provision is applicable to the business. The hours of part-time employees shall be aggregated to determine the number of full-time employee equivalents.
“Reimbursed business property loss” means loss compensated for by insurance or any other source.
“Small business” or “business” means a business having no more than 20 full-time employees or full-time employee equivalents in any month during 2012.
2. a. A taxpayer that is a small business having a business location in a shore municipality whose business property at that location was destroyed, damaged, or lost as a result of wind, flooding, or other storm conditions caused by or attributable to Hurricane Sandy shall be allowed a credit against the tax imposed pursuant to the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq., in an amount equal to the amount of reinvestment in business property located in that same municipality in excess of the amount of its reimbursed business property loss, subject to the limitations of this section.
b. The total amount of tax credits allowed pursuant to this section and section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall not exceed the least of:
(1) the unreimbursed business property loss of the business at the business location in the shore municipality;
(2) the amount of reinvestment made by the business at the business location in the shore municipality in excess of the reimbursed property loss at that location; or
(3) $100,000.
c. The tax credit shall be allowed for reinvestment placed in service in the shore municipality within two years following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) and shall be claimed for the taxable year of the taxpayer first following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) or the taxable year in which the reinvestment takes place. The priority in which tax credits allowed pursuant to this section and any other tax credits shall be taken shall be determined by the director. The amount of the tax credit allowable pursuant to this section which cannot be applied for the taxable year may be carried over, if necessary, to the seven taxable years following the taxable year for which the tax credit was allowed.
d. A small business classified as a partnership for federal income tax purposes shall not be allowed a tax credit directly, but the amount of a taxpayer credit with respect to a distributive share of partnership income, shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the partnership that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer's taxable year except as otherwise provided by law.
A small business that is a New Jersey S Corporation shall not be allowed a tax credit directly, but the amount of credit of a taxpayer in respect of a pro rata share of S Corporation income, shall be determined by allocating to the taxpayer that proportion of the credit acquired by the New Jersey S Corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro rata share of S Corporation income of the New Jersey S Corporation for its privilege period ending within or with the taxpayer's taxable year.
e. As used in this section:
“Shore municipality” means a municipality in this State bordering on the Atlantic Ocean or Delaware Bay.
“Business property” means real property used in the taxpayer’s business, such as business structures and fixtures, and tangible personal property used in the taxpayer’s business, such as supplies, inventory and equipment.
“Full-time employee” means an employee working for the taxpayer for at least 140 hours per month at a wage not less than the State or federal minimum wage, if either minimum wage provision is applicable to the business. The hours of part-time employees shall be aggregated to determine the number of full-time employee equivalents.
“Reimbursed business property loss” means loss compensated for by insurance or any other source.
“Small business” or business means a business having no more than 20 full-time employees or full-time employee equivalents in any month during 2012.
3. Notwithstanding any provision of the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the director may adopt, immediately upon filing with the Office of Administrative Law, regulations as the director deems necessary which shall be effective for a period not to exceed 360 days following the date of enactment of P.L. , c. (C. ) and may thereafter be amended, adopted, or readopted by the director in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).
4. This act shall take effect immediately.
STATEMENT
This bill provides a corporation business tax credit or a gross income tax credit to certain small businesses at the New Jersey shore that lost business property due to Hurricane Sandy.
A small business that was located in a municipality in this State bordering on the Atlantic Ocean or Delaware Bay, whose business property was destroyed or damaged by Hurricane Sandy, and who reinvests in business property in that same municipality can qualify for a tax credit.
A tax credit may equal that part of a business’ reinvestment that exceeds any compensation payment the business received from insurance companies or other parties for the business property loss, subject to a $100,000 limit. In order to qualify for a tax credit a business could not have had more than 20 full-time employees or full-time employee equivalents in any month of 2012 and the new business property must be put in service within two years following the effective date of the bill.