A5626

An Act providing a gross income tax credit to certain active members of volunteer emergency service organizations, and supplementing chapter 4 of Title 54A of the New Jersey Statutes.

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

1. a. As used in this section:

“Active duty” means, with respect to an active member of a volunteer emergency services organization, direct participation in the organization’s response to emergency calls or alarms, extinguishing of fires, or other provision of emergency services for the protection of life and property from harm.

“Active member” means a member of a volunteer services organization who, during the entire taxable year for which a credit is claimed under this section, is a member in good standing with active member status of the organization and received no remuneration, other than clothing allowances or other monetary reimbursement for clothing, for its upkeep, or both, for serving with the organization. Benefits accrued or received under the “Emergency Services Volunteer Length of Service Award Program Act,” P.L.1997, c.388 (C.40A:14-183 et seq.) shall not be deemed to be remuneration for the purposes of this section.

“Ancillary duty” means, with respect to an active member of a volunteer emergency services organization, performance of any duty, other than active duty, attendance at official meetings of the organization, or participation in authorized drills, training classes or exercises conducted by the organization, that may be required to maintain membership in good standing in the organization.

“Duty hours” means the hours during which a member of a volunteer emergency services organization has committed to respond to any alarm that may occur, whether or not an alarm actually occurs during those hours.

“Qualifying service” means the minimum amount of qualifying service, including active duty and ancillary duty, respectively, to be performed by an active member of a volunteer emergency service organization during a taxable year to be eligible for a tax credit pursuant to this section, as determined by the director.

“Volunteer emergency services organization” means:

(1) a fire company, part-paid fire department, volunteer fire department, or fire district designated or incorporated under the laws of this State for the purpose of protecting life and property from fire, serving one or more counties or municipalities within this State;

(2) an emergency first aid, ambulance, or rescue squad or association, composed of volunteers and incorporated or associated as a nonprofit corporation or association under the laws of this State, which provides emergency first aid, ambulance, or rescue services to one or more counties or municipalities within this State;

(3) any county or municipal volunteer Office of Emergency Management recognized by and rendering service in any county or municipality within this State; and

(4) an auxiliary police organized pursuant to section 13 of P.L.1942, c.251 (C.App.A.9-45).

b. A taxpayer who is an active member of a volunteer emergency service organization shall be allowed a credit against the tax otherwise due pursuant to the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq., as follows:

(1) a taxpayer who during the taxable year performs the minimum amount of qualifying service determined by the director shall be allowed a credit in an amount equal to $1,000; and

(2) a taxpayer who during the taxable year performs qualifying service in excess of the minimum amount of qualifying service determined by the director shall be allowed a credit in an amount equal to $1,500.

c. In the case of married individuals filing jointly, each individual shall be allowed to claim the credit authorized pursuant to this section.

d. A taxpayer who is not subject to tax in accordance with N.J.S.54A:2-4 for a taxable year may apply for a credit using an application to be made available by the director. The due date for a tax credit application submitted pursuant to this section shall coincide with the due date for annual gross income tax returns.

e. If the credit allowed pursuant to this section, together with any other payments, credits, deductions, and adjustments allowed by law, reduces a taxpayer’s tax liability otherwise due under N.J.S.54A:1-1 et seq. to an amount less than zero, the amount of the credit remaining shall be paid to the taxpayer as a refund of an overpayment in accordance with N.J.S.54A:9-7; provided, however, that subsection (f) of that section, concerning the allowance of interest shall not apply.

f. On or before January 15 of each year, each volunteer emergency services organization shall certify to the director a list of the active members of the organization during the taxable year ending on the preceding December 31, together with any documentation of that service as the director may require.

g. The director, in consultation with the Commissioner of Community Affairs, the Commissioner of Health, and the Superintendent of the State Police, shall adopt, in accordance with the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14-1 et seq.), such rules and regulations as may be necessary to effectuate the purposes of this section, including, but not limited to, the prescription of the minimum amount of qualifying service to be performed by a taxpayer to be eligible for the credit allowed under this section and the information to be included in the certification submitted by each volunteer emergency services organization.

2. This act shall take effect immediately and shall apply to taxable years beginning on or after the January 1 next following the date on which the rules and regulations adopted pursuant to subsection g. of section 1 of this act become effective.

STATEMENT

This bill establishes a refundable gross income tax credit for qualifying active members of volunteer emergency services organizations.

The amount of the credit would be based on whether a taxpayer performed a minimum amount of qualifying service for a volunteer emergency service organization during the taxable year, as determined by the Director of the Division of Taxation in the Department of the Treasury (director). If the taxpayer performed the minimum amount of qualifying service during the taxable year, then the taxpayer would be eligible for a tax credit of $1,000. If the taxpayer performed qualifying service in excess of the minimum amount of qualifying service, then the taxpayer would be eligible for a tax credit of $1,500. If married individuals filing a joint return both qualify for the credit, each individual would be allowed the credit as may be applicable.

To be eligible for the credit, a taxpayer is required to be an active member of a volunteer emergency services organization. The bill defines an “active member” as a member of an active member of a volunteer emergency services organization who, during the entire taxable year for which a credit is claimed, is a member in good standing with active member status of the organization and received no remuneration, other than clothing allowances or other monetary reimbursement for clothing, for its upkeep, or both, for serving with the organization.

The bill defines a “volunteer emergency services organization to include: (1) a fire company, part-paid fire department, volunteer first department or fire district; (2) an emergency first aid, ambulance, or rescue squad or association; (3) a county or municipal volunteer Office of Emergency Management; and (4) auxiliary police. The training and service requirements for volunteer members of these organizations are determined by different State departments and agencies. Accordingly, the bill requires the director in consultation with the Commissioner of Community Affairs, the Commissioner of Health, and the Superintendent of the State Police, to adopt regulations establishing the minimum amount of qualifying service that a member of a volunteer emergency service organization is required to perform to be eligible for a tax credit.

The bill also requires each volunteer emergency services organization to certify to the director, on or before January 15 of each year, a list of the active members of the organization during the prior taxable year. The certification will assist the Division of Taxation in verifying a taxpayer’s eligibility for a gross income tax credit under the bill.