A4575

An Act allowing credits against the corporation business tax and the gross income tax to businesses employing certain released nonviolent offenders and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and Title 54A of the New Jersey Statutes.

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

1. a. 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) in an amount equal to 15 percent of the wages paid by the taxpayer during the privilege period for the employment of a released nonviolent offender, but not to exceed $900 for each released nonviolent offender employed by the taxpayer during the privilege period.

b. As used in this section, "released nonviolent offender" means an adult individual who at 18 years of age or older committed a criminal offense or a disorderly persons offense, other than an offense included under subsections b. through g. of section 11 of P.L.1971, c.317 (C. 52:4B-11), and other than an offense that involved the use, attempted use, or threat to use force against another person or property, who after incarceration or after serving an alternative sentence, has been released to the community under the supervision of the courts, a paroling authority, a probation authority, a corrections authority, or other criminal justice agency, or has successfully completed that community supervision.

c. 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.54:10-5), shall not exceed 50 percent 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 (C.54:10A-1 et seq.). The priority in which credits allowed pursuant to this section and any other credits shall be taken shall be 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.

2. a. A taxpayer shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to 15 percent of the wages paid by the taxpayer during the taxable year for the employment of a released nonviolent offender during the taxable year, but not to exceed $900 for each released nonviolent offender employed by the taxpayer during the taxable year.

b. As used in this section:"released nonviolent offender" means an adult individual who at 18 years of age or older committed a criminal offense or a disorderly persons offense, other than an offense included under subsections b. through g. of section 11 of P.L.1971, c.317 (C.52:4B-11), and other than an offense that involved the use, attempted use, or threat to use force against another person or property, who after incarceration or after serving an alternative sentence, has been released to the community under the supervision of the courts, a paroling authority, a probation authority, a corrections authority, or other criminal justice agency, or has successfully completed that community supervision.

c. The amount of the credit applied pursuant to this section for a taxable year, when taken together with any other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et seq., shall not exceed 50 percent of the taxpayer's liability for tax for the taxable year that bears the same proportional relationship to the total amount of such liability as the amount of the taxpayer's gross income, derived from New Jersey sources and attributable to the business or professional activity in which the taxpayer employs the released nonviolent offender during that taxable year, bears to the taxpayer's entire gross income for that year. The amount of the credit otherwise allowable under this section which cannot be applied for the taxable year due to the limitations of this subsection may be carried over, if necessary to the seven taxable years following the taxable year for which the credit was allowed.

d. A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a credit under this section directly, but the amount of credit of a taxpayer in respect of a distributive share of entity income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the entity that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the entity for its taxable year ending within or with the taxpayer's taxable year.

e. A New Jersey S corporation shall not be allowed a credit directly under the gross income tax, 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.

3. This act shall take effect immediately and shall apply to wages paid in privilege periods and taxable years beginning after enactment.

STATEMENT

This bill allows corporation business tax and gross income tax credits to businesses that employ released nonviolent adult offenders. The amount of each credit would be equal to 15 percent of the wages paid to the ex-offender with a maximum of $900 per ex-offender.

A released nonviolent offender is an adult individual who at 18 years of age or older committed a criminal offense or a disorderly persons offense, other than an offense included under subsections b. through g. of section 11 of P.L.1971, c.317 (C.52:4B-11) (dangerous offenses that may be compensated for by the Victims of Crime Compensation Office), and other than an offense that involved the use, attempted use, or threat to use force against another person or property, who after incarceration or after serving an alternative sentence, has been released to the community under the supervision of the courts, a paroling authority, a probation authority, a corrections authority, or other criminal justice agency, or has successfully completed that community supervision.

This bill is similar to the federal Work Opportunity Tax Credit, which provides federal tax breaks for employers who are willing to hire workers who have a felony conviction in their background. This bill is limited to hires of ex-offenders who have less dangerous and nonviolent offenses in their background and have completed their terms of incarceration or are under or have completed community supervision. It provides these employers with an additional incentive to hire these ex-offenders, whose employment will aide in their rehabilitation and reentry into society.