Division of Taxation to Administer and Collect Taxes previously done by the Casino Control Commission
Public Law 2011, Chapter 19 on was signed on February 1, 2011 and took effect immediately upon signing and the orderly transition of responsibilities and functions from the Casino Control Commission to the Division of Gaming Enforcement. This should take place by May 1, 2011.
The Division of Taxation will now administer and collect several taxes that had previously been administered and collected by the New Jersey Casino Control Commission. These taxes include: the gross revenue tax, the casino hotel room fee, and the multi-casino progressive slot machine revenue tax.
The gross revenue tax is an 8% tax on the gross revenues of a casino licensee as defined by Section 24 of P.L.2011, c.19. N.J.S.A. 5:12-144. The casino hotel room fee is a $3 per day fee on each hotel room in a casino hotel facility that is occupied by a guest. N.J.S.A. 5:12-145. The multi-casino progressive slot machine revenue tax is an 8% tax on the casino service industry multi-casino progressive slot machine revenue. N.J.S.A. 5:12-148.2.
Taxpayers that were required to file and remit tax returns under the prior version of the Casino Control Act must now file tax returns and make payment to the Division of Taxation. This new requirement is applicable to returns for the above listed taxes that are due after April 30, 2011.
UEZ Point of Purchase Exemption
Public Law 2011, c. 28, signed into law on March 1, 2011, became effective and applies to sales or services made or rendered on or after the first day of the first month next following the date of its enactment. That effective date is April 1, 2011.
This new law amends section 20 of P.L.1983, c.303 (N.J.S.A. 52:27H-79). It allows all qualified Urban Enterprise Zone (UEZ) businesses to be eligible to receive the sales tax exemption at the point-of-purchase regardless of annual gross receipts. Previously, P.L.2006, c.34 (amended by P.L.2007, c.328 and P.L.2008, c118) restricted the point-of-purchase exemption from sales and use tax on eligible purchases made by certain small qualified businesses for exclusive use or consumption of such business in the Enterprise zone. Larger UEZ businesses had to file for refunds.
P.L. 2011, c.30, signed into law on March 1, 2011 and effective immediately upon signing, amends and or supplements the New Jersey Business Corporation Act (N.J.S.A. 14A:1-1et seq.) by providing for the creation of a benefit corporation. This is a corporation organized and subject to the provisions of the New Jersey Business Corporation Act. The purpose of a benefit corporation is to create a "general public benefit," defined as a material positive impact on society and the environment, through activities that promote some combination of specific public benefits.
These benefit corporations would be subject to corporate business tax as they would be formed under N.J.S.A. 14A:1-1 et seq. (as opposed to N.J.S.A. 15A:1-1, et seq., the New Jersey Nonprofit Corporation Act). Finally, the benefit corporations must file a benefit report with the Department of the Treasury through the Division of Revenue.
Public Law 2011, c.35 was signed into law on March 1, 2011 and became effective immediately.
This law would encourage nonprofit corporations and associations to help transform vacant properties located in older urban areas into gardens for growing fresh fruits and vegetables. Existing provisions of law authorize municipalities and counties to lease or sell public property not needed for a public use to nonprofit entities for them to perform specified laudatory public purposes thereon. This new law would affect lands in cities of the first, second, third and fourth classes.
The cultivation and sale of fresh fruits and vegetables will now be among the list of purposes for which certain municipalities may lease or sell public land for nominal consideration. Previously, the law allowed for the long-term lease of excess public land, but not the sale thereof, to nonprofits for gardening purpose. Now, the transformation of excess vacant public lands into urban farms is a public purpose and the law affords these lands exemptions from property taxation.
Municipalities to Provide for a Dedicated Library Purposes Tax on the Property Tax Bill
Public Law 2011, c.38 was signed into law on March 21, 2011 and became effective immediately on March 21, 2011.
This new law requires municipalities in which a free public library is located or that belong to a joint municipal library to provide for a dedicated library purposes tax on the property tax bill.
Specifically, a municipality must pay over to the library or the joint municipal library funds due to the library on a quarterly basis. The law further assures that there will be no net impact on a municipality’s non-library purposes adjusted tax levy for the purposes of the cap law. The Director of the Division of Local Government Services in the Department of Community Affairs is now required to proportionately decrease the adjusted tax levy of affected municipalities to ensure that any statutorily required municipal support of free public libraries is exempt from the calculation of a municipality’s adjusted tax levy for the purposes of the 2% levy cap.
The Division of Taxation is required to segregate the municipal library tax on the local property tax bill/Abstract of Ratables. All system-related changes will be performed by the Office of Information Technology.
Streamlined Sales and Use Tax Agreement Technical Changes
P.L. 2011, Chapter 49 was signed into law on April 8, 2011 and became effective immediately except that sections 1 through 15 become operative on the first day of the first month next following the date of enactment or May 1, 2011.
This new law makes various technical changes in sales tax law to maintain compliance with the Streamlined Sales and Use Tax Agreement, which was adopted by New Jersey in 2005.
For purposes of compliance, the bill removes the current definition of, and eliminates references to, "digital property" under sales tax law and replaces it with "specified digital product," the defined term for electronically transferred digital products under the SSUTA. This change technically modifies but does not substantively affect the taxability of digitally downloaded music, movies, books, and certain other goods currently subject to the sales and use tax.
To conform the State’s current tax treatment of digital goods within the parameters of the defined term under the Agreement, the law makes certain other ancillary changes that were required in addition to the adoption of the new SSUTA definition. Specifically, it: (1) revises the definition of "retail sale" to reiterate that sales of specified digital products are only taxable to end users (sales for resale are excluded from tax); (2) specifies that a digital code which provides a purchaser the right to obtain the product will be treated as a specified digital product for purposes of taxation; (3) stipulates that specified digital products are subject to tax regardless of whether the sale of the product is for permanent or less than permanent use and regardless of whether continued payment for the product is required; and (4) carves out a specific statutory exemption for all video programming services, including video on demand television services, and broadcasting services, including content to provide such services to ensure that sales of those services are not taxable as specified digital products. The former digital property definition excluded these services, so this exception is necessary to maintain treatment under prior law.
The new law also provides a separate statutory exemption for specified digital products that are accessed but not delivered electronically to the consumer. Previously, New Jersey excluded from tax digital property that is streamed or uploaded, temporarily, to a consumer to access certain digital content. However, "specified digital products" includes electronically transferred digital audio-visual works, digital audio works, and digital books, where "transferred electronically" means obtained by the purchaser by means other than tangible storage media. Presumably, transferred electronically includes instances where specified digital products are streamed or uploaded, and the exemption, therefore, ensures that access alone is not used to determine the taxability of specified digital products. This exemption is merely to maintain treatment under prior law
New compliance provisions incorporate SSUTA provisions that relieve certain sellers from liability due to changes in the sales and use tax rate. The Director of the Division of Taxation may not hold a seller liable for failure to collect tax that may be due at a new tax rate, if the director provides less than 30 days between the date a change in rate is enacted and the date that change takes effect.
The relief from liability is, however, limited and further described in the new statute.
The law makes technical changes and clarifications to the tax by removing remaining references to the previously defined term "vendor," and replacing with "seller." and removing charges for installation as part of the enumerated charges included in the definition of "sales price."
The elimination of installation charges from the definition of "sales price" clarifies the imposition of tax on charges for installation. A separate statutory provision specifies that installation charges are an enumerated service subject to the sales and use tax, regardless of how "sales price" is defined. This revision is merely to clarify treatment of installation charges, which have always been statutorily subject to tax.
(Note: This bill represents the fifth time the State has amended the sales and use tax to comply with the SSUTA.)
Boys and Girls Club in the New Jersey Fund Checkoff
Assembly Bill No. 3267, which was signed into law as P.L. 2011, Chapter 57 on April 20, 2011 takes effect immediately and applies to taxable years beginning on or after the January 1, 2012.
The new law establishes the "Boys and Girls Club in the New Jersey Fund" and provides for a designation on the State gross income tax return so that taxpayers may make voluntary contributions to the fund to support the programs and services of New Jersey’s Boys and Girls Clubs.
This ‘checkoff’ will operate in the same manner as all other charitable designations available to gross income taxpayers. It will be effective for 2012 and subsequent tax years.
Single Sales Fraction for Corporation Business Tax Income Allocation Formula
Senate Bill No. 2753, which was signed into law as P.L. 2011, Chapter 59 on April 28, 2011 takes effect immediately; provided however, that section 2 shall apply to privilege periods beginning on or after January 1, 2012.
The new law modifies the corporation business tax (CBT) formula used to determine the portion of the income of a corporation subject to tax by the State of New Jersey from a three-factor formula to a single sales factor formula, and establishes a specialized sales fraction formula for airlines that are subject to taxation.
Under the old law, the CBT employed a formula that apportions a share of a corporation’s income to this State based on a weighted average of a corporation’s property in this State over the corporation’s total property representing 25% of the apportionment; (2) a corporation’s sales in this State over the corporation’s total sales representing 50% of the apportionment; and (3) the corporation’s payroll in this State over the corporation’s total payroll accounting for the remaining 25% of the apportionment.
Pursuant to the new law, this change is phased in over three years, commencing with privilege periods beginning on or after January 1, 2012 but before January 1, 2013. For that year, the sales fraction will account for 70% of the apportionment and the property and payroll fractions will each account for 15% of the apportionment. For privilege periods beginning on or after January 1, 2013 but before January 1, 2014, the sales fraction will increase to 90% and the property and payroll fractions will each account for 5% of the apportionment. For privilege periods beginning on or after January 1, 2014, the sales fraction will account for 100% of the apportionment.
The sales fraction for airlines was previously determined based on the ratio of departures from New Jersey to total departures, weighted as to cost and value of aircraft by type, whereas this act institutes a sales fraction determined as the ratio of an airline’s revenue miles in this State divided by an airline’s total revenue miles.
This law represents one aspect of the Governor’s FY 2012 tax relief proposals and is expected to result in tax savings to affected corporations of $24 million in the first year, $38.5 million in FY 2013, $60.5 million in FY 2014, $87.5 million in FY 2015, $98 million in FY 2016 with savings equaling or exceeding $98 million in future periods.
Alternative Business Calculation under the Gross Income Tax
Senate Bill No. 2754, which was signed into law as P.L. 2011, Chapter 60 on April 28, 2011 and took effect immediately upon signing, applies to taxable years beginning on or after January 1, 2012.
The act establishes an alternative business calculation under the gross income tax as a mechanism that permits taxpayers who generate income from different types of business entities to offset gains from one type of business with losses from another, and permits taxpayers to carry forward business-related losses for a period of up to 20 taxable years.
Gains and losses derived from one or more of the following business-related categories of gross income: net profits from business; net gains or net income derived from or in the form of rents, royalties, patents, and copyrights; distributive share of partnership income; and net pro rata share of S corporation income may be netted. A taxpayer who sustains a loss from a sole proprietorship may apply that loss against income derived from a partnership, subchapter S corporation, or rents and royalties, but is prohibited from applying those losses from those categories of income that are not related to the taxpayer’s conduct of the taxpayer’s own business, including salaries and wages, the disposition of property, and interest and dividends.
The law provides that net losses from the business-related categories of income may be carried forward and applied against income in future taxable years. The law limits the application of net losses which are carried forward to gains and losses from the same business-related categories of income from which the net loss is derived, and allows the losses to be carried forward for a period of up to 20 taxable years following the year the net loss occurs.
This new law phases in the tax savings over five years beginning with tax year 2012. The new law is a part of the Governor’s FY 2012 tax relief program and is expected to result in taxpayer savings of $23 million in FY 2012, $67 million in FY 2013, $117 million in FY 2014, $176 million in FY 2015, $200 million in FY 2016 and further savings thereafter.
Tobacco Products Wholesale Sales and Use Tax Act, and Cigarette Tax Act
Senate Bill No. 2175, which was signed into law as P.L. 2011, Chapter 80 on June 29, 2011 took effect immediately upon signing.
This new law amends the "Tobacco Products Wholesale Sales and Use Tax Act," "Cigarette Tax Act" and related criminal statutes. The act supplements and makes a number of changes to P.L. 1990, c. 39 (N.J.S.A. 54:40B-1, et eq.) and P.L. 1948, c. 65 (N.J.S.A. 2C:64-1), respectively.
This new law now provides that all tobacco products subject to the tax imposed under P.L. 1990, c. 39 (C. 54:40B-1 et seq.), on which the tax has not been paid as required found in any place in this State are declared to be prima facie contraband goods and may be seized by the director, the director’s agents or employees, or by any peace officer of this State, when so ordered by the director, without a warrant and may authorize its use for law enforcement purposes of any untaxed tobacco products forfeited.
In addition, the director may order the return of any seized tobacco product when the director has reason to believe, upon the presentation of satisfactory proof, that the owner has not willfully or intentionally evaded any tax imposed by P.L. 1990, c. 39 (C. 54:40B-1 et seq.).
Although the director may order the destruction of any tobacco product, as an alternative to destruction, the director may resell any untaxed tobacco product to the manufacturer of that tobacco product, but such tobacco product shall be resold only for export or destruction.
All unstamped cigarettes forfeited to this State under this section would be destroyed. However, the director may, prior to the destruction of cigarettes, permit the true holder of the trademark rights in the cigarette brand to inspect such cigarettes, in order to assist the director in any investigation regarding such cigarettes.
The seizure of any unstamped or illegally stamped cigarettes or any other contraband cigarettes under the provisions of this section would not relieve any person from a fine, imprisonment or other penalty for violation of any of the provisions of this act. The director, the director's agents, employees, and any peace officer of this State, when directed so to do, would not in any way be responsible in any court for the seizure or the confiscation of any unstamped or illegally stamped packages of cigarettes.
Corporation Business Tax Research Expense Credit
Senate Bill No.2980, which was signed into law as P.L. 2011, Chapter 83 on June 30, 2011 and took effect immediately upon signing, applies to privilege periods beginning on or after January 1, 2012.
The act eliminates the limit on the application of the corporation business tax research expense credit for privilege periods beginning on or after January 1, 2012 to 50% of liability otherwise due for the tax period.
The research expense credit remains equal to 10% of the increase in “qualified research expenses” (research performed by or for the taxpayer) in a tax year over a base amount, plus 10% of the “basic research payments” (university research funded by the taxpayer) in a tax period. The credit is limited to expenditures made in New Jersey. This act does not affect the allowance of the credit.
The act retains the restriction that the credit may not reduce the tax liability to less than the statutory minimum and retains the Director’s prerogative as to prioritization of corporation business tax credits.
Minimum Corporation Business Tax
Senate Bill No. 2981, which was signed into law as P.L. 2011, Chapter 84 on June 30, 2011, took effect immediately upon signing.
The act decreases the minimum corporation business tax on New Jersey subchapter S corporations by 25% for taxable periods beginning on or after January 1, 2012, as follows:
|New Jersey Gross Receipts||Minimum Tax|
|Less than $100,000||$375.00|
|$100,000 or more but less than $250,000||$562.50|
|$250,000 or more but less than $500,000||$750.00|
|$500,000 or more but less than $1,000,000||$1,125.00|
|$1,000,000 or more||$1,500.00|
The minimum tax of New Jersey subchapter S corporations that are members of affiliated or controlled groups with total payrolls of $5 million or more will remain $2,000 annually.
“Urban Transit Hub Tax Credit Act” (“UTHTCA”) and the “New Jersey Economic Stimulus Act of 2009” Expanded
Senate Bill No. 2972, which was signed into law as P.L. 2011, Chapter 89 on July 26, 2011, became effective immediately upon signing.
The new law expands the “Urban Transit Hub Tax Credit Act” (“UTHTCA”) and the “New Jersey Economic Stimulus Act of 2009” (“Stimulus Act”) to include certain mixed use projects as creditable investments and to change the manner in which the tax credits under the UTHTCA are treated by eligible businesses.
Currently, under the UTHTCA, a business may receive tax credits of up to 100 percent of its qualified capital investment in a business facility that (1) is located in an urban transit hub (i.e., an “urban aid” municipality, served by a commuter rail station, in which at least 30 percent of real property value is exempt from property taxes), and (2) employs at least 250 persons at the facility. Annually for ten years, the business may apply a credit equal to 10 percent of the amount of the investment against corporation business tax, insurance premiums tax or gross income tax liability. A tenant in these qualified business facilities may also be allowed credits, if the tenant occupies space in the facility that proportionally represents at least $17,500,000 of the capital investment in the facility and employs at least 250 persons in the facility. For a business or a tenant to be eligible for the credit, the owner of the facility has to have made or acquired capital investments in the facility of not less than $50 million.
Under a separate but similar urban transit hub tax credit program enacted as part of the Stimulus Act, a developer could receive tax credits of up to 20 percent of its capital investment in a qualified residential project located in an urban transit hub, subject to the same $50 million project investment requirement applicable to a qualified business facility.
Now, with the enactment of the new law, credits of up to 35 percent of an eligible applicant’s capital investment in a mixed use project comprising both a qualified business facility and a qualified residential project, neither of which by itself satisfies the total investment minimum of $50 million, subject to certain restrictions as set forth in the act is allowed.
Carry Forward Credits for Urban Transit Hub Tax Credit recipients
Urban Transit Hub Tax Credit recipients may now (1) carry forward the credits into no more than 20 subsequent tax accounting or privilege periods and limit the amount allowed in any fiscal year to $150 million, and (2) increase from 20 to 35 percent the proportion of the cost of capital invested in a qualified residential project located within an urban transit hub that a developer could receive as a tax credit. The definition of “urban transit hub” now includes any rail spur located adjacent to or within a one mile radius surrounding the entrance to property for loading and unloading freight cars on trains.
Job Relocation Within the State No Longer a Factor
The New Jersey Economic Development Authority (“EDA”) cannot now consider the relocation of a job within the State as a factor in making its determination of whether a capital investment would yield a net positive benefit to the State, unless the business proposes to transfer existing jobs as part of a consolidation of business operations from two or more locations and municipalities. Previously, the EDA considered a job relocated within the State as a new job and therefore, creating a benefit.
Municipalities to determine percentage for occupancy by low or moderate income households within an urban transit hub
Finally, for the purposes of mixed use projects or qualified residential projects where a business receives an urban transit hub tax credit, the amended bill allows eligible municipalities under the UTHTCA to determine the amount of the percentage, up to 20 percent of the total, of newly-constructed residential units set aside for occupancy by low or moderate income households within an urban transit hub.
New Jersey National Guard Fund
Assembly Bill No. 2286, which was signed into law as P.L. 2011, Chapter 117 on August 19, 2011, becomes effective for tax years 2012 and thereafter.
The new law establishes the "NJ National Guard State Family Readiness Council Fund" and provides for a designation on the State gross income tax return that will permit taxpayers to make voluntary contributions to the fund.
This fund will provide for support to members of the NJ National Guard and their families. This support is intended to help members and their families cope during difficult times when a wage-earner has temporarily left civilian employment to be placed on active military duty. The council provides education, counseling and financial planning so the spouses of deployed Guard members have what they need to cope.
Employee Leasing Companies
Senate Bill No. 2164 was signed into law as P.L. 2011, Chapter 118 on August 19, 2011. The act makes various changes to several laws that affect the regulation and business operations of employee leasing companies, or professional employer organizations (PEOs). Employee leasing companies are business entities that manage human resources, employee benefits, health insurance, and payroll and workers' compensation for small businesses. Companies contract with an employee leasing company to assist them with employee related matters such as health benefits, workers' compensation claims, payroll, payroll tax compliance, and unemployment insurance claims, allowing the client companies to concentrate on the operational aspects of their businesses. Employee leasing companies are not temporary employment agencies; employee leasing companies become “co-employers” of the employees of the businesses to which they provide services. Employee leasing companies are regulated by the Department of Labor and Workforce Development pursuant to P.L. 2001, c. 260 (34:8-67 et seq.).
Specifically the New Jersey employee leasing company statute: 1) establishes a limited registration process for certain small out-of-state employee leasing companies; 2) makes several changes to the financial test for Department of Labor registration of employee leasing companies; 3) allows for the electronic filing of compliance documents; 4) clarifies certain responsibilities, rights and liabilities of employee leasing companies, client companies, and covered employees as well as a host of other provisions affecting these entities. The act also supplements the “Sales and Use Tax Act,” P.L. 1966, c. 32 (C. 54:32B-1 et seq.) to clarify and allocate the tax liabilities of client companies and employee leasing companies if the tax were to be applied prospectively to services provided by client companies or to services provided by employee leasing companies. Also, this bill similarly clarifies and allocates tax liabilities of a per-employee tax or payroll tax imposed on a client company or an employee leasing company. Lastly, the new law clarifies that a tax credit or economic benefit or incentive available to employers accrues to a client company employer with an agreement with an employee leasing company.
Surplus Lines Insurance Premium
Senate Bill No. 2930 was signed into law as P.L. 2011, Chapter 119, on 8/19/2011. The act revises the method for the regulation and collection of surplus lines insurance premium taxes by the Department of Banking and Insurance. These revisions are intended to bring “the surplus lines law,” P.L. 1960, c. 32 (C. 17:22-6.40 et seq.), into compliance with the federal “Nonadmitted and Reinsurance Reform Act of 2010” (NRRA - part of the Dodd-Frank Wall Street Reform and Consumer Protection Act). Under NRRA, the ability to share surplus lines premium tax revenue will be suspended in July 2011 until such time as New Jersey enters into a multi-state compact or agreement with one or more other states.
A state that does not join such an agreement may collect 100 percent of the taxes due from insureds located in its state, otherwise known as “home-state” insureds” (as detailed in the law). Accordingly, this bill authorizes the Commissioner of Banking and Insurance to enter into compacts or agreements with other states with respect to such collections.
Moratorium on Statewide non-residential development fees
P.L. 2011, Chapter 122, which was signed into law on August 24, 2011, is effective immediately and applicable to taxable years ending after enactment.
The act extends for two years, until July 1, 2013, the moratorium on the imposition of fees on non-residential construction projects.
The fees, known as Statewide non-residential development fees were enacted as part of a revision of the "Fair Housing Act," pursuant to P.L.2008, c.46. A moratorium was placed on the imposition of the fees until July 1, 2010, pursuant to the "Economic Stimulus Act of 2009," P.L.2009, c.90 extended again by this statute. Any monies paid during the period from July 1, 2010 to the present must be repaid. Municipalities that are eligible to collect non-residential development fees would not be required to refund monies that have been spent on affordable housing projects.
Small Business Assistance in Identifying Financial Assistance
P.L. 2011, Chapter 123 which was signed into law on September 1, 2011 takes effective immediately.
The act provides for the Department of State, in consultation with the New Jersey Economic Development Authority, to establish and maintain a program to assist small businesses in identifying financial assistance programs offered by any State agency, for which the business may be eligible. A uniform application will be devised for the purpose of gathering basic operational and financial information from small businesses seeking assistance under this program, and any additional information as deemed necessary by the department.
The Department of State is provided rulemaking authority.
Bulk Sales Law Retroactive
P.L. 2011, Chapter 124 was signed into law as on September 14, 2011 and is effective retroactive to August 1, 2007.
The act exempts certain sales of real property from the bulk sale notification requirements that are used to administer State taxes. The purchaser of those assets must notify the Director of the sale at least 10 days before the transfer of goods or payment, or the purchaser can become liable for taxes owed by the seller. The Director must respond within that 10-day timeframe.
If the Director notifies the purchaser that the seller owes State taxes, the purchaser must escrow any sums owed to the State. If the purchaser fails to notify the Director, the purchaser can be held liable for any taxes of the seller. If the Director fails to respond to the notice within the allowed time the sale can continue and the purchaser has no liability for the seller’s taxes.
The act now provides an exemption from the bulk sale notification requirements for sales of a simple dwelling house if the seller, transferrer or assignor is an “individual,” “estate,” or “trust” as those terms are used for gross income tax purposes.
However, sales of assets still subject to bulk sales law provisions apply to the sale, transfer or assignment of a simple dwelling house if the seller, transferrer or assignor is a business entity, including but not limited to a corporation or a partnership. “Simple dwelling house” is defined in the new law.
Bulk sale provisions will also exempt seasonal rentals or leases of real property if the seller, transferrer or assignor is an “individual,” “estate,” or “trust” as those terms are used for gross income tax purposes.
Senior Gold Prescription Discount Program
P.L. 2011, Chapter 131 which was signed into law on September 16, 2011 and effective immediately, requires the Director of the Division of Taxation to prominently display the eligibility qualifications for and benefits available under the "Senior Gold Prescription Discount Program," N.J.S.A.30:4D-43 et seq., in the gross income tax/homestead rebate instruction booklet, whether provided electronically or in print, so that the information will be available to both persons who file electronically and those who file paper returns for tax years 2011 and thereafter.
The director would have the discretion to determine the placement of this information within the instruction booklet, provided that the phone number to call for information about the Senior Gold Prescription Discount Program is included.
Grow New Jersey Assistance Program
Senate Bill No 3033 ScaScaSaAcaAca (5R) which was signed into law as P.L. 2011, Chapter 149 on January 5, 2012, became effective immediately upon signing.
The act establishes the Grow New Jersey Assistance Program to encourage businesses to engage in economic development, job creation and the preservation of existing jobs within New Jersey. The new law establishes a $200 million tax credit incentive program that emphasizes growth of New Jersey-based companies through capital investment, creation of new jobs and retention of existing jobs.
To be eligible for program tax credits, the law requires a business to make capital investments of at least $20,000,000 at a qualified business facility at which it will employ at least 100 full-time employees in retained full-time jobs, or create at least 100 new full-time jobs in an industry deemed desirable by the New Jersey Economic Development Authority (EDA). Eligibility for program tax credits is entirely the province of the EDA.
The program’s cost falls under the $1.5 billion cap established under the “Urban Transit Hub Tax Credit” (“UTHTC”) program. The bill allows the initial $200 million program allocation to be increased by the board of the EDA if the board determines the credits to be reasonable, justifiable, and appropriate. The bill requires that all applications for eligibility under the program shall be made to the EDA by July 1, 2014.
The new law provides that the amount of tax credits that can be applied by a business annually under the program cannot exceed the lesser of one-tenth of the capital investment, or $4,000,000. The Urban Transit Hub Tax Credit is capped at $1.5 billion over its 10-year life.
An eligible business will receive a base tax credit of $5,000 per job, per year, for 10 years with no distinction between retained or new jobs. The tax credit term of 10 years includes an annual compliance review for credit issuance. The base tax credit may be increased by a bonus award amount of up to $3,000 per job by an eligible business, as determined by the authority based on factors in the act. The per-project benefit shall not exceed the capital investment at the project site. Tax credits issued to an eligible business are transferable through elective tax credit transfer certificates.
There are provisions herein which would call for forfeiting of the benefit for noncompliance.
The definition of “urban transit hub” under the UTHTC law will now include in the eligibility criteria for that tax credit assistance program any project commencing construction located within a half mile radius of a New Jersey Transit Corporation rail station sited at an international airport, except for any property owned or controlled by the Port Authority of New York and New Jersey.
The law makes clarifying changes to the "Business Retention and Relocation Assistance Grant" (“BRRAG”) program to expand the definition of “capital investment” and to repeal the requirement that tax credits issued under the BRRAG program may not be applied by the business against liability until the State Treasurer has certified that the amount of retained State tax revenue from the business for the tax period prior to the period in which the credits will be applied, equals or exceeds the amount of the tax credits.
Finally, the State Treasurer may make certain sales and conveyances to the New Jersey Performing Arts Center.
Motor Fuel Signs Must Display Cash and Credit Prices
Senate Bill No.847, which was signed into law as P.L. 2011, Chapter 152 on January 5, 2012, became effective the 120th day following its enactment, or May 4, 2012.
The new law provides that price signs posted by a retail motor fuel dealer on the dealer’s premises and visible from any adjacent roadway shall include the price per gallon, or the price per gallon and per liter, for both cash and credit card purchases of motor fuel in accordance with regulations prescribed by the Director of the Division of Taxation.
A Rebate, Allowance, Concession, or Benefit Allowable through Purchases for Motor Fuels on a Credit, Debit or Rewards Card
Assembly Bill No.3133, which was signed into law as P.L. 2011, Chapter 164 on January 5, 2012, becomes effective immediately upon its signing.
The new law amends subsection e. of section 201 of P.L. 1938, c. 163 (C. 56:6-2) to stipulate that a consumer who earns credits through purchases on a credit card, debit card, or rewards card may utilize those credits to receive a rebate, allowance, concession, or benefit when that person purchases motor fuels.
The use of credits earned through purchases on a credit card, debit card, or rewards card would not change the retail price of motor fuel displayed pursuant to section 3 of P.L. 1952, c. 258 (C. 56:6-2.3); and (2) the retail dealer would not bear the cost of the rebate, allowance, concession, or benefit received by the motor fuel purchaser, except for a processing fee assessed in the ordinary course of business.
No Special Permit Needed for Wine or Beer Manufactured For Personal Or Household Use Or Consumption
Assembly Bill No.4012, which was signed into law as P.L. 2011, Chapter 169 on January 5, 2012, became effective immediately upon its signing.
Under the previous law, a person over age 21 could annually manufacture at home up to 200 gallons of wine or beer for personal or household use or consumption. Prior to producing the wine or beer, the person is required to obtain a special permit from the Director of the Division of Alcoholic Beverage Control. This new law eliminates the requirement to obtain a permit. Home production of wine or beer continues to be limited to a maximum of 200 gallons annually under federal regulations.
Authorizes Municipalities to Sell and Lease Public Property for “Urban Farming and Gardening Purposes”
Assembly Bill No.4114, which was signed into law as P.L. 2011, Chapter 171 on January 5, 2012, became effective upon its signing.
This new law amends various parts of the statutory law to allow all municipalities to sell and lease public property not needed for public purposes to certain nonprofit entities for “urban” farming and gardening purposes. Under the previous law, this practice is restricted to municipalities located in cities of the first, second, third or fourth class.
Reports and Publications Produced by the State or its Agencies to be made available electronically on the Internet
Senate Bill No.1217 (1R), which was signed into law as P.L. 2011, Chapter 184 on January 17, 2012, became effective upon its signing.
The new law requires that any reports and publications produced by the State or its agencies and submitted to the Governor, the Legislature, or the public must be made available electronically on the Internet instead of being printed in hard copy. Individuals who are unable to access reports or publications electronically on the Internet may request a printed copy of the documents. Notice may require that copies be furnished to the State Librarian.
The new law does not apply to the publication and distribution of the New Jersey Administrative Code and the New Jersey Register.
The act repeals N.J.S.A.52:14-21, 22, 25, and 25.2 and makes certain other technical changes and clarifications.
Phase Out of the Cosmetic Medical Procedure Gross Receipts Tax
Senate Bill No.1988 (2R), which was signed into law as P.L. 2011, Chapter 189 on January 17, 2012, becomes effective immediately upon its signing.
The new law phases out the cosmetic medical procedure gross receipts tax (P.L.2004, c. 53 (C. 54:32E-1)), the tax which is to be paid pursuant to P.L. 2004, c. 53 (C. 54:32E-1 et seq.). The current 6% rate will be reduced to 4% on taxable services performed on or after July 1, 2012 but before July 1, 2013. It is further reduced to 2% on taxable services performed on or after July 1, 2013 but before July 1, 2014, and eliminated entirely on taxable services performed on or after July 1, 2014.
Out-of-State winery license
Senate Bill No. 3172, which was signed into law as P.L. 2011, Chapter 207 on January 17, 2012, becomes effective on the first day of the fourth month after its enactment or April 1, 2012.
The new law permits direct shipping by wineries and creates an out-of-State winery license. In doing so, it makes various changes to the statutes governing the sale and distribution of products by New Jersey wineries and creates a new Out-of-State winery license governing New Jersey sales by wineries licensed in other states.
Plenary wineries that produce a maximum of 250,000 gallons per year and farm wineries would be permitted to directly sell their products to licensed retailers after paying a fee set forth in the bill. Plenary wineries would pay a graduated fee ranging from $100 to $1,000 and farm wineries would pay a fee of $100. The winery is required to retain the original invoices for any wine shipped for at least three years on the winery premises for inspection by the State.
Previously, all plenary and farm winery licensees were permitted to sell their products to retailers. The new law causes all plenary and farm wineries to be able to sell their products to licensed wholesalers. The law also permits the wineries to sell their products by the glass at the salesrooms.
American Red Cross-NJ Fund
Assembly Bill No.1400 (2R), which was signed into law as P.L. 2011, Chapter 211 on January 17, 2012, becomes effective for 2012 and subsequent tax years.
The new law establishes the “American Red Cross-NJ Fund” and provides for a designation on the State gross income tax return so that taxpayers may make voluntary contributions to the fund to support the programs and services of the American Red Cross-NJ. This checkoff will operate in the same manner as all other charitable designations available to gross income taxpayers.
Girl Scouts Councils in New Jersey Fund
Assembly Bill No.4182, which was signed into law as P.L. 2011, Chapter 227 on January 17, 2012, becomes effective immediately and applies to taxable years beginning on or after the January 1, 2013 and will be effective for 2013 and subsequent tax years.
The new law establishes the “Girl Scouts Councils in New Jersey Fund” and provides for a designation on the State gross income tax return so that taxpayers may make voluntary contributions to the fund to support the programs and services of the Girl Scouts Councils in New Jersey.
This checkoff will operate in the same manner as all other charitable designations available to gross income taxpayers.