A3220

An Act concerning the promotion and protection of agriculture, amending and supplementing various parts of the statutory law, and making an appropriation.

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

1. Section 1 of P.L.1939, c.136 (C.4:10-16) is amended to read as follows:

1. For the purpose of advertising and promoting the sale of New Jersey farm products and the “Jersey Fresh” program the Secretary of Agriculture is hereby authorized to solicit and receive funds, either as direct contributions, or from the sale of labels or the right to use the same as hereinafter provided, or from any other source for such purposes, and such monies shall be deposited by him in a bank or trust company designated under provisions of law to accept deposits of State money, in a special fund to be known as the “New Jersey Farm Products Publicity Fund.” The Secretary of Agriculture may notify interested persons and business entities of the opportunity to contribute funds to be used for that purpose.

(cf: P.L.1939, c.136, s.1)

2. Section 3 of P.L.1966, c.30 (C.54:32B-3) is amended to read as follows:

3. There is imposed and there shall be paid a tax of 7% upon:

(a) The receipts from every retail sale of tangible personal property or a specified digital product for permanent use or less than permanent use, and regardless of whether continued payment is required, except as otherwise provided in this act.

(b) The receipts from every sale, except for resale, of the following services:

(1) Producing, fabricating, processing, printing or imprinting tangible personal property or a specified digital product, performed for a person who directly or indirectly furnishes the tangible personal property or specified digital product, not purchased by him for resale, upon which such services are performed.

(2) Installing tangible personal property or a specified digital product, or maintaining, servicing, repairing tangible personal property or a specified digital product not held for sale in the regular course of business, whether or not the services are performed directly or by means of coin-operated equipment or by any other means, and whether or not any tangible personal property or specified digital product is transferred in conjunction therewith, except (i) such services rendered by an individual who is engaged directly by a private homeowner or lessee in or about his residence and who is not in a regular trade or business offering his services to the public, (ii) such services rendered with respect to personal property exempt from taxation hereunder pursuant to section 13 of P.L.1980, c.105 (C.54:32B-8.1), (iii) (Deleted by amendment, P.L.1990, c.40), (iv) any receipts from laundering, dry cleaning, tailoring, weaving, or pressing clothing, and shoe repairing and shoeshining and (v) services rendered in installing property which, when installed, will constitute an addition or capital improvement to real property, property or land, other than landscaping services and other than installing carpeting and other flooring.

(3) Storing all tangible personal property not held for sale in the regular course of business; the rental of safe deposit boxes or similar space; and the furnishing of space for storage of tangible personal property by a person engaged in the business of furnishing space for such storage.

"Space for storage" means secure areas, such as rooms, units, compartments or containers, whether accessible from outside or from within a building, that are designated for the use of a customer and wherein the customer has free access within reasonable business hours, or upon reasonable notice to the furnisher of space for storage, to store and retrieve property. Space for storage shall not include the lease or rental of an entire building, such as a warehouse or airplane hangar, or the lease or rental of a stall in a barn, stable, or other similar structure or facility for the boarding or stabling or for the keeping or holding of a horse, pony, mule, donkey, or hinny.

(4) Maintaining, servicing or repairing real property, other than a residential heating system unit serving not more than three families living independently of each other and doing their cooking on the premises, whether the services are performed in or outside of a building, as distinguished from adding to or improving such real property by a capital improvement, but excluding services rendered by an individual who is not in a regular trade or business offering his services to the public, and excluding garbage removal and sewer services performed on a regular contractual basis for a term not less than 30 days.

(5) Mail processing services for printed advertising material, except for mail processing services in connection with distribution of printed advertising material to out-of-State recipients.

(6) (Deleted by amendment, P.L.1995, c.184).

(7) Utility service provided to persons in this State, any right or power over which is exercised in this State.

(8) Tanning services, including the application of a temporary tan provided by any means.

(9) Massage, bodywork or somatic services, except such services provided pursuant to a doctor's prescription.

(10) Tattooing, including all permanent body art and permanent cosmetic make-up applications, except such services provided pursuant to a doctor's prescription in conjunction with reconstructive breast surgery.

(11) Investigation and security services.

(12) Information services.

(13) Transportation services originating in this State and provided by a limousine operator, as permitted by law, except such services provided in connection with funeral services.

(14) Telephone answering services.

(15) Radio subscription services.

Wages, salaries and other compensation paid by an employer to an employee for performing as an employee the services described in this subsection are not receipts subject to the taxes imposed under this subsection (b).

Services otherwise taxable under paragraph (1) or (2) of this subsection (b) are not subject to the taxes imposed under this subsection, where the tangible personal property or specified digital product upon which the services were performed is delivered to the purchaser outside this State for use outside this State.

(c) (1) Receipts from the sale of prepared food in or by restaurants, taverns, or other establishments in this State, or by caterers, including in the amount of such receipts any cover, minimum, entertainment or other charge made to patrons or customers, except for meals especially prepared for and delivered to homebound elderly, age 60 or older, and to disabled persons, or meals prepared and served at a group-sitting at a location outside of the home to otherwise homebound elderly persons, age 60 or older, and otherwise homebound disabled persons, as all or part of any food service project funded in whole or in part by government or as part of a private, nonprofit food service project available to all such elderly or disabled persons residing within an area of service designated by the private nonprofit organization; and

(2) Receipts from sales of food and beverages sold through vending machines, at the wholesale price of such sale, which shall be defined as 70% of the retail vending machine selling price, except sales of milk, which shall not be taxed. Nothing herein contained shall affect other sales through coin-operated vending machines taxable pursuant to subsection (a) above or the exemption thereto provided by section 21 of P.L.1980, c.105 (C.54:32B-8.9).

The tax imposed by this subsection (c) shall not apply to food or drink which is sold to an airline for consumption while in flight.

(3) For the purposes of this subsection:

"Food and beverages sold through vending machines" means food and beverages dispensed from a machine or other mechanical device that accepts payment; and

"Prepared food" means:

(i) A. food sold in a heated state or heated by the seller; or

B. two or more food ingredients mixed or combined by the seller for sale as a single item, but not including food that is only cut, repackaged, or pasteurized by the seller, and eggs, fish, meat, poultry, and foods containing these raw animal foods requiring cooking by the consumer as recommended by the Food and Drug Administration in Chapter 3, part 401.11 of its Food Code so as to prevent food borne illnesses; or

C. food sold with eating utensils provided by the seller, including plates, knives, forks, spoons, glasses, cups, napkins, or straws. A plate does not include a container or packaging used to transport the food;

provided however, that

(ii) "prepared food" does not include the following sold without eating utensils:

A. food sold by a seller whose proper primary NAICS classification is manufacturing in section 311, except subsector 3118 (bakeries);

B. food sold in an unheated state by weight or volume as a single item; or

C. bakery items, including bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies, and tortillas.

(d) The rent for every occupancy of a room or rooms in a hotel in this State, except that the tax shall not be imposed upon a permanent resident.

(e) (1) Any admission charge to or for the use of any place of amusement in the State, including charges for admission to race tracks, baseball, football, basketball or exhibitions, dramatic or musical arts performances, motion picture theaters, except charges for admission to boxing, wrestling, kick boxing or combative sports exhibitions, events, performances or contests which charges are taxed under any other law of this State or under section 20 of P.L.1985, c.83 (C.5:2A-20), and, except charges to a patron for admission to, or use of, facilities for sporting activities in which such patron is to be a participant, such as bowling alleys and swimming pools. For any person having the permanent use or possession of a box or seat or lease or a license, other than a season ticket, for the use of a box or seat at a place of amusement, the tax shall be upon the amount for which a similar box or seat is sold for each performance or exhibition at which the box or seat is used or reserved by the holder, licensee or lessee, and shall be paid by the holder, licensee or lessee.

(2) The amount paid as charge of a roof garden, cabaret or other similar place in this State, to the extent that a tax upon such charges has not been paid pursuant to subsection (c) hereof.

(f) (1) The receipts from every sale, except for resale, of intrastate, interstate, or international telecommunications services and ancillary services sourced to this State in accordance with section 29 of P.L.2005, c.126 (C.54:32B-3.4).

(2) (Deleted by amendment, P.L.2008, c.123)

(g) (Deleted by amendment, P.L.2008, c.123)

(h) Charges in the nature of initiation fees, membership fees or dues for access to or use of the property or facilities of a health and fitness, athletic, sporting or shopping club or organization in this State, except for: (1) membership in a club or organization whose members are predominantly age 18 or under; and (2) charges in the nature of membership fees or dues for access to or use of the property or facilities of a health and fitness, athletic, sporting or shopping club or organization that is exempt from taxation pursuant to paragraph (1) of subsection (a) of section 9 of P.L.1966, c.30 (C.54:32B-9), or that is exempt from taxation pursuant to paragraph (1) or (2) of subsection (b) of section 9 of P.L.1966, c.30 and that has complied with subsection (d) of section 9 of P.L.1966, c.30.

(i) The receipts from parking, storing or garaging a motor vehicle, excluding charges for the following: residential parking; employee parking, when provided by an employer or at a facility owned or operated by the employer; municipal parking, storing or garaging; receipts from charges or fees imposed pursuant to section 3 of P.L.1993, c.159 (C.5:12-173.3) or pursuant to an agreement between the Casino Reinvestment Development Authority and a casino operator in effect on the date of enactment of P.L.2007, c.105; and receipts from parking, storing or garaging a motor vehicle subject to tax pursuant to any other law or ordinance.

For the purposes of this subsection, "municipal parking, storing or garaging" means any motor vehicle parking, storing or garaging provided by a municipality or county, or a parking authority thereof.

(cf: P.L.2013, c.193, s.1)

3. (New section) Charges for storing a horse, pony, mule, donkey, or hinny in a barn, stable, or other similar structure or facility by a person engaged in the business of boarding or stabling or otherwise keeping or holding horses, ponies, mules, donkeys, or hinnies are exempt from the tax imposed pursuant to the “Sales and Use Tax Act,” P.L.1966, c.30 (C.54:32B-1 et seq.).

4. (New section) Charges for maintaining or servicing a horse, pony, mule, donkey, or hinny that is boarded or stabled or that is kept or held in a barn, stable, or other similar structure or facility by a person engaged in the business of boarding or stabling or otherwise keeping or holding horses, ponies, mules, donkeys, or hinnies are exempt from the tax imposed pursuant to the “Sales and Use Tax Act,” P.L.1966, c.30 (C.54:32B-1 et seq.).

5. (New section) a. The director shall refund any tax, penalty, or interest collected or paid on or after October 1, 2006 but before the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) in connection with any receipts from sales or charges with regard to the lease or rental of a stall in a barn, stable, or other similar structure or facility for the boarding or stabling or for the keeping or holding of a horse, pony, mule, donkey, or hinny that have been excluded or exempted from tax pursuant to section 3 of P.L.1966, c.136 (C.54:32B-3) or sections 3 or 4 of P.L. , c. (C. ) (pending before the Legislature as this bill), if application to the director for refund is filed, notwithstanding the limitations on the time prescribed for filing a claim for refund by section 20 of P.L.1966, c.30 (C.54:32B-20) or by R.S.54:49-14 to the contrary, within 24 months of the effective date of P.L. , c. (pending before the Legislature as this bill).

b. An application for refund allowed pursuant to this section may be filed by a customer who paid the tax or by a person required to collect the tax, who has collected and paid over the tax to the director, on forms furnished by the director and accompanied by any information and documentation that the director determines to be necessary and appropriate to verify the tax, penalty, or interest collected or paid and to establish, if application is filed by a person required to collect the tax, that the person has repaid to the customer the amount of any tax for which the application for refund is filed.

c. The director shall examine each application for refund filed pursuant to this section and shall make a determination regarding a refund, based upon such rules and regulations as may be prescribed by the director, within 90 days of the date the application for refund is filed.

d. If upon examination of an application for refund filed pursuant to this section, the director determines that there has been an overpayment of tax, penalty, or interest, the amount of the overpayment shall be credited against any State tax liability of the person and, if there is no State tax liability, the person shall be allowed a refund of the overpaid tax, penalty, or interest. Interest shall be allowed and paid on the amount of any overpayment not credited or refunded within 90 days of the date the director’s determination for refund is made at the rate required to be paid on overpayments pursuant to section 7 of P.L.1992, c.175 (C.54:49-15.1), determined for each month or fraction thereof, compounded annually at the end of each year, from the date the director’s determination for refund is made until the date the credit or refund of overpayment is made.

e. If upon examination of an application for refund filed pursuant to this section, the director rejects the application, in whole or in part, the director shall make an order accordingly and serve notice to the person who filed the application for refund within 10 days of the date the director’s determination for refund is made. A person aggrieved by the director’s determination may, within 90 days of the date notice is served, file a protest and request a hearing in accordance with the procedures established for aggrieved taxpayers pursuant to R.S.54:49-18.

6. (New section) Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the Director of the Division of Taxation in the Department of the Treasury may adopt immediately upon filing with the Office of Administrative Law such rules and regulations as the director determines to be necessary and appropriate to effectuate the purposes of section 3 of P.L.1966, c.130 (C.54:32B-3) as amended by section 2 of P.L. , c. (pending before the Legislature as this bill) and sections 3 through 5 of P.L. , c. (Cc. ) (pending before the Legislature as this bill), which shall be effective for a period not exceeding 360 days following the effective date of P.L. , c. (pending before the Legislature as this bill) 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.).

7. (New section) a. A taxpayer that is an eligible employer 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 product of the total number of hours worked by eligible employees during the privilege period for which they are paid the State minimum wage and the amount, if any, by which the State minimum wage exceeds the federal minimum wage.

b. The order of priority of the application of the credit allowed in accordance with subsection a. of this section and any other credits allowed by law against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) shall be as prescribed by the Director of the Division of Taxation.

c. If the amount of the credit allowed pursuant to this section exceeds the amount of tax otherwise due, that amount of excess shall be an overpayment for the purposes of N.J.S.54:49-14.

d. An eligible employer who discharges an ineligible employee and replaces that employee with an eligible employee solely for the purpose of qualifying for this credit does not qualify to claim the credit for any eligible employee.

e. As used in this section:

“Eligible employee” means an employee who is employed by an eligible employer in the State and is paid the State minimum wage during some part of the taxable year by the eligible employer.

“Eligible employer” means a person that is engaged in farming operations in the State.

“Farming operations” means the commercial growing, harvesting, producing, or raising of agricultural products including crops, dairy animals, livestock, fur-bearing animals, poultry, bees, aquacultural products, horticultural products, and trees and forest products.

“Federal minimum wage” means the minimum wage rate established pursuant to 29 U.S.C. s.206 or its successors.

“State minimum wage” means the minimum wage rate established pursuant to Article I, paragraph 23 of the New Jersey State Constitution.

8. (New section) a. A taxpayer that is an eligible employer shall be allowed a credit against the tax otherwise due for the taxable year under the “New Jersey Gross Income Tax,” N.J.S.54A:1-1 et seq., in an amount equal to the product of the total number of hours worked by eligible employees during the taxable year for which they are paid the State minimum wage and the amount, if any, by which the State minimum wage exceeds the federal minimum wage.

b. A business entity that is classified as a partnership for federal income tax purposes shall not be allowed the credit directly under N.J.S.54A:1-1 et seq., but the amount of credit of the taxpayer in respect of a distributive share of partnership income shall be determined by allocating to the taxpayer that proportion of the 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.

A taxpayer that is a New Jersey S corporation shall not be allowed the credit directly under N.J.S.54A:1-1 et seq., 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.

c. The order of priority of the application of the credit allowed in accordance with subsection a. of this section and any other credits allowed by law against the tax otherwise due for the taxable year under N.J.S.54A:1-1 et seq. shall be as prescribed by the Director of the Division of Taxation.

d. If the amount of the credit allowed pursuant to this section exceeds the amount of tax otherwise due, that amount of excess shall be an overpayment for the purposes of N.J.S.54A:9-7; provided however, that subsection (f) of N.J.S.54A:9-7 shall not apply.

e. An eligible employer who discharges an ineligible employee and replaces that employee with an eligible employee solely for the purpose of qualifying for this credit does not qualify to claim the credit for any eligible employee.

f. As used in this section:

“Eligible employee” means an employee who is employed by an eligible employer in the State and is paid the State minimum wage during some part of the taxable year by the eligible employer.

“Eligible employer” means a person that is engaged in farming operations in the State.

“Federal minimum wage” means the minimum wage rate established pursuant to 29 U.S.C. s.206 or its successors.

“State minimum wage” means the minimum wage rate established pursuant to Article I, paragraph 23 of the New Jersey State Constitution.

9. (New section) a. No person may, for the purpose of hindering or preventing the lawful farming of agricultural products, harass, bother, or otherwise interfere with a farmer engaged in farming operations. This section shall not apply to a law enforcement officer enforcing the laws of this State or any local ordinance.

b. As used in this section:

“Agricultural products” includes crops, dairy animals, livestock, fur-bearing animals, poultry, bees, aquacultural products, horticultural products, and trees and forest products.

“Farmer” means any person engaged in the commercial growing, harvesting, producing, or raising of agricultural products.

10. (New section) a. The Secretary of Agriculture may institute a civil action in the Superior Court for injunctive and other relief for a violation of section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill), and the court may proceed in the action in a summary manner.

b. A person who violates section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be guilty of a petty disorderly persons offense; however, for a second or subsequent violation, the person shall be guilty of a disorderly persons offense.

c. A person who violates section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall be liable to a civil penalty of not less than $250 nor more than $500 for each offense, to be collected in a summary proceeding under the “Penalty Enforcement Law of 1999,” P.L.1999, c.274 (C.2A:58-10 et seq.). The Superior Court and the municipal court for the municipality in which the violation occurred shall have jurisdiction to enforce the “Penalty Enforcement Law of 1999.”

d. For the purposes of subsections b. and c. of this section, if the violation is of a continuing nature, each day during which it continues shall constitute an additional, separate, and distinct offense.

e. In addition to bringing a civil action for injunctive relief or any other relief provided by law, a person who is adversely affected by a violation of section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill) may bring a civil action for damages, including punitive damages and special damages, against the violator. Special damages may include, but need not be limited to, lost profits and the cost of damages to any farmland, supplies, equipment, and agricultural products caused by the activities of the violator.

11. (New section) A respondent who prevails in an action brought pursuant to section 5 of P.L.1998, c.48 (C.4:1C-10.1) because the commercial agricultural operation, activity or structure is found to be entitled to the irrebuttable presumption established in section 7 of P.L.1983, c.31 (C.4:1C-10) shall be awarded reasonable costs and attorney fees to be paid by the complainant upon a determination that the complaint was brought in bad faith.

A respondent seeking an award under this section shall submit an application to the county board or committee detailing the costs and attorney fees incurred in the defense of the complaint. If the county board or committee determines that the complaint was brought in bad faith, the county board or committee shall determine if the costs and attorney fees, or a portion thereof, are reasonable, and shall issue an order requiring the complainant to pay the reasonable costs and attorney fees.

12. There is appropriated from the General Fund to the New Jersey Agricultural Experiment Station – Rutgers University the sum of $1,000,000 for the purposes of production agriculture research and extension work.

13. This act shall take effect immediately; provided, however, that sections 2, 3, and 4 shall be retroactive to October 1, 2006 and apply to all services rendered on or after that date; and sections 7 and 8 shall apply to privilege periods and taxable years beginning on or after January 1, 2014.

STATEMENT

This bill contains several provisions concerning the promotion and protection of agriculture.

Section 1 of the bill allows the Secretary of Agriculture to notify interested individuals and business entities of the opportunity to contribute funds to advertise and promote the sale of New Jersey farm products and the “Jersey Fresh” program. “Jersey Fresh” is an advertising, promotional, and quality grading program launched by the Department of Agriculture in 1984. Over the years, the program has increase consumers’ awareness of New Jersey agricultural products, and become the benchmark for other states to initiate their own state-grown agricultural marketing programs.

Sections 2 through 6 of the bill clarify the sales tax collection responsibilities of horse-boarding businesses in New Jersey. Specifically, the taxable service of “furnishing space for storage” is redefined to exclude from tax charges for the lease or rental of certain stable stalls for the boarding of horses, ponies, mules, donkeys, or hinnies. Under the bill, charges for boarding, maintaining, and caring for horses, ponies, mules, donkeys, and hinnies that are boarded in certain stable stalls by a person engaged in the business of such boarding are likewise exempt from the sales tax. These sections would take effect immediately, but apply retroactively to October 1, 2006. By providing an exemption for horse boarding and related services, this bill eliminates confusion and provides clarity to New Jersey businesses.

Sections 7 and 8 provide farmers with credits against the corporation business tax and the gross income tax for the increased cost of labor caused by the increase in the minimum wage. Specifically, eligible employers are allowed a tax credit equal to the total number of hours worked by eligible employees during the taxable year for which they are paid the State minimum wage multiplied by the amount, if any, by which the State minimum wage exceeds the federal minimum wage. An eligible employer is defined as any person engaged in farming operations in the State. An eligible employee is an employee who is employed by an eligible employer in the State and is paid the State minimum wage during some part of the taxable year by the eligible employer. An eligible employer who fires an ineligible employee and replaces that employee with an eligible one solely for the purpose of qualifying for this credit does not qualify to claim the credit for any eligible employee.

Sections 9 and 10 prohibit harassing, bothering, or otherwise interfering with a farmer engaged in farming operations for the purpose of hindering or preventing the lawful farming of agricultural products. A person who harasses a farmer would be guilty of a petty disorderly persons offense, the penalty for which is imprisonment for up to 30 days, a fine of up to $500, or both a fine and imprisonment. For a second or subsequent offense, the violator would be guilty of a disorderly persons offense, punishable by imprisonment for up to six months, a fine of up to $1,000, or both a fine and imprisonment. A violator would also be subject to a civil penalty of between $250 and $500 for each violation. The bill also provides that a person who is adversely affected by a violation would be able to bring a civil action for injunctive and other relief as well as for damages, including punitive and special damages, against the violator.

Section 11 would strengthen the legal protections provided to farmers under the “Right to Farm Act.” Specifically, the bill would allow farmers to recover reasonable costs and attorney fees incurred in the defense of bad faith complaints against commercial agricultural operations, activities or structures that conform to agricultural management practices recommended by the State Agriculture Development Committee (SADC), or have been determined by the SADC or appropriate committee board to constitute a generally accepted agricultural operation or practice, and that do not violate any relevant State or federal laws nor pose a direct threat to public health and safety.

Finally, section 12 makes an appropriation of $1 million from the General Fund to the New Jersey Agricultural Experiment Station for production agriculture research and extension work. The experiment station, which is the research and outreach arm of Rutgers University, conducts research and other activities in the areas of food, agriculture, marine and environmental sciences and their application to the improvement of the human condition.