Bill Text: NJ A1774 | 2012-2013 | Regular Session | Introduced
Bill Title: Provides corporation business tax and gross income tax credits for certain business telecommuting program development and implementation costs.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2012-01-10 - Introduced, Referred to Assembly Appropriations Committee [A1774 Detail]
Download: New_Jersey-2012-A1774-Introduced.html
STATE OF NEW JERSEY
215th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2012 SESSION
Sponsored by:
Assemblyman SCOTT RUDDER
District 8 (Atlantic, Burlington and Camden)
SYNOPSIS
Provides corporation business tax and gross income tax credits for certain business telecommuting program development and implementation costs.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act providing a corporation business tax and a gross income tax credit for certain business telecommuting program development and implementation costs, 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. As used in this section:
"Eligible telecommute expenses" means an expense incurred by the taxpayer during the privilege period pursuant to a telecommute agreement, up to a limit of $1,200 for each participating employee, which enables a participating employee to telecommute, including, but not limited to, an expense paid or incurred to purchase: computers, computer related hardware and software, modems, data processing equipment, telecommunications equipment, high-speed Internet connectivity equipment, computer security software and devices, and any associated delivery, installation, or maintenance fees; provided, however, that an eligible telecommute expense shall not include replacement costs for: computers, computer related hardware and software, modems, data processing equipment, telecommunications equipment, or computer security software and devices at the principal place of business if that equipment is relocated to the telecommute site of a participating employee. Eligible telecommute expenses shall not be incurred more than once per participating employee, and shall not include an expense for which a credit is claimed under any other provision of P.L.1945, c.162 (C.54:10A-1 et seq.);
"Participating employee" means an employee who has entered into a telecommute agreement on or after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill); provided, however, that a participating employee shall not include an individual who is self-employed or who, prior to the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), spends a majority of the workday at a location other than the taxpayer's principal place of business;
"Telecommute" means to perform normal and regular work functions on a workday that ordinarily would be performed at the taxpayer's principal place of business at a different location, thereby eliminating or substantially reducing the physical commute to and from that taxpayer's principal place of business; provided, however, that telecommute shall not include a home based business, an extension of the workday, or an extension of the work week;
"Telecommute agreement" means an agreement signed by the taxpayer and the participating employee, on or after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), that defines the terms of a telecommute arrangement, including the number of days per year the participating employee will telecommute, as provided in subsection b. of this section to qualify for the credit, and any restrictions on the place from which the participating employee will telecommute; and
"Telecommute assessment" means an assessment leading to the development of policies and procedures necessary to implement a telecommute program which would qualify the taxpayer for the credit provided in subsection b. of this section, including but not limited to: a workforce profile, a telecommute program business case and plan, a detailed accounting of the purpose, goals, and operating procedures of the telecommute program, methodologies for measuring telecommute program activities and achievements, and a schedule for increasing telecommute activity.
b. For privilege periods beginning on or after January 1, 2010 but before January 1, 2012, 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 a percentage of the eligible telecommute expenses incurred during the privilege period. The amount of credit shall be equal to: (1) 100 percent of the eligible telecommute expenses incurred pursuant to a telecommute agreement requiring the participating employee to telecommute not less than 12 days per month; or (2) 50 percent of the eligible telecommute expenses incurred pursuant to a telecommute agreement requiring the participating employee to telecommute not less than five days per month.
c. In addition to the credit provided by subsection b. of this section, a taxpayer conducting a telecommute assessment on or after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) but before January 1, 2012, shall be allowed a credit for the privilege period of implementation of the taxpayer's telecommute program against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to 100 percent of the cost, up to a maximum credit of $20,000 per taxpayer, of preparing the telecommute assessment. For purposes of this subsection, costs incurred on or after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) but before January 1, 2010, shall be treated as being incurred on January 1, 2010, and costs incurred after December 31, 2009 but before January 1, 2011, shall be treated as incurred on January 1, 2011. The credit provided by this subsection shall include program planning expenses, including, but not limited to: direct program development and training costs, raw labor costs, and professional consulting fees; provided, however, that the credit provided under this subsection shall not include expenses for which a credit is claimed under any other provision of P.L.1945, c.162 (C.54:10A-1 et seq.); provided further, that the credit shall not be allowed more than once per taxpayer.
d. (1) A taxpayer seeking to claim a credit allowed under subsection b. or c. of this section shall submit an application to the director for tentative approval of the credit provided for in subsection b. or c. of this section between September 1 and October 31 of the year preceding the privilege period for which the credit is to be allowed. The director shall promulgate rules and forms on which the application shall be submitted. Amounts specified on an application shall not be changed by the taxpayer after the application is approved by the director. The application shall certify that the taxpayer would not have incurred the eligible telecommute expenses mentioned therein but for the availability of the credit provided in this section. The director shall review the application and shall tentatively approve the application upon determining that it meets the requirements of this section.
(2) The director shall provide tentative approval of the applications meeting the requirements of this section by December 31st of the year in which the application was submitted. The aggregate amount of credits approved by the director for all qualified taxpayers under this section during a privilege period shall not exceed:
(a) $2,000,000 for credits earned in privilege periods beginning on or after January 1, 2010, but before January 1, 2011; and
(b) $2,000,000 for credits earned in privilege periods beginning on or after January 1, 2011, but before January 1, 2012.
(3) The division shall notify each taxpayer of the credits tentatively approved and allocated by December 31st of the year in which the application was submitted. If the credit amounts on the credit applications filed with the director exceed the maximum aggregate limit of credits under this subsection, then the credits shall be allocated among taxpayers who filed an application on a pro rata basis based upon the amounts otherwise allowed in this section. Once the credit application has been approved and the amount approved has been communicated in writing to the applicant, the taxpayer may make purchases approved for the credit at any time during the privilege period following the approval of the application. The taxpayer may then apply the amount of the approved credit to the taxpayer's tax liability for the privilege period or privilege periods for which the approved application applies.
e. 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 exceed 50 percent of the tax liability otherwise due and shall not reduce the tax liability to an amount less that the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5). The order of priority of the application of the credit allowed under this section and any other credits allowed by law shall be prescribed by the director. The amount of the credit otherwise allowable under this section which cannot be applied to the tax imposed in a privilege period due to the limitations of this subsection or under other provisions of P.L.1945, c.162 (C.54:10A-1 et seq.) may be carried over, if necessary, to the seven consecutive privilege periods following the privilege period for which the credit is allowed.
f. Notwithstanding any other law to the contrary, on or before December 31, 2011, for credits allowed in calendar year 2010, and on or before December 31, 2012, for credits allowed in calendar year 2011, the director shall prepare and transmit to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature a report disclosing the names and the amounts of credits claimed by taxpayers under the provisions of subsection b. or c. of this section.
2. a. As used in this section:
"Eligible telecommute expenses" means an expense incurred by the taxpayer during the taxable year pursuant to a telecommute agreement, up to a limit of $1,200 for each participating employee, which enables a participating employee to telecommute, including, but not limited to, an expense paid or incurred to purchase: computers, computer related hardware and software, modems, data processing equipment, telecommunications equipment, high-speed Internet connectivity equipment, computer security software and devices, and any associated delivery, installation, or maintenance fees; provided, however, that an eligible telecommute expense shall not include replacement costs for: computers, computer related hardware and software, modems, data processing equipment, telecommunications equipment, or computer security software and devices at the principal place of business if that equipment is relocated to the telecommute site of a participating employee. Eligible telecommute expenses shall not be incurred more than once per participating employee, and shall not include an expense for which a credit is claimed under any other provision of the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.;
"Participating employee" means an employee who has entered into a telecommute agreement on or after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill); provided, however, that a participating employee shall not include an individual who is self-employed or who, prior to the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), spends a majority of the workday at a location other than the taxpayer's principal place of business;
"Telecommute" means to perform normal and regular work functions on a workday that ordinarily would be performed at the taxpayer's principal place of business at a different location, thereby eliminating or substantially reducing the physical commute to and from that taxpayer's principal place of business; provided, however, that telecommute shall not include a home based business, an extension of the workday, or an extension of the work week;
"Telecommute agreement" means an agreement signed by the taxpayer and the participating employee, on or after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), that defines the terms of a telecommute arrangement, including the number of days per year the participating employee will telecommute, as provided in subsection b. of this section to qualify for the credit, and any restrictions on the place from which the participating employee will telecommute; and
"Telecommute assessment" means an assessment leading to the development of policies and procedures necessary to implement a telecommute program which would qualify the taxpayer for the credit provided in subsection b. of this section, including but not limited to: a workforce profile, a telecommute program business case and plan, a detailed accounting of the purpose, goals, and operating procedures of the telecommute program, methodologies for measuring telecommute program activities and achievements, and a schedule for increasing telecommute activity.
b. For taxable years beginning on or after January 1, 2010 but before January 1, 2012, a taxpayer shall be allowed a credit against the tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to a percentage of the eligible telecommute expenses incurred during the taxable year. The amount of the credit shall be equal to: (1) 100 percent of the eligible telecommute expenses incurred pursuant to a telecommute agreement requiring the participating employee to telecommute not less than 12 days per month; or (2) 50 percent of the eligible telecommute expenses incurred pursuant to a telecommute agreement requiring the participating employee to telecommute not less than five days per month.
c. In addition to the credit provided by subsection b. of this section, a taxpayer conducting a telecommute assessment on or after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) but before January 1, 2012, shall be allowed a credit for the taxable year of implementation of the taxpayer's telecommute program against the tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to 100 percent of the cost, up to a maximum credit of $20,000 per taxpayer, of preparing a telecommute assessment. For purposes of this subsection, costs incurred on or after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) but before January 1, 2010, shall be treated as being incurred on January 1, 2010, and costs incurred after December 31, 2009 but before January 1, 2011, shall be treated as incurred on January 1, 2011. The credit provided by this subsection shall include program planning expenses, including, but not limited to: direct program development and training costs, raw labor costs, and professional consulting fees; provided, however, that the credit provided under this subsection shall not include expenses for which a credit is claimed under any other provision of the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.; provided further, that the credit shall not be allowed more than once per taxpayer.
d. (1) A taxpayer seeking to claim a credit allowed under subsection b. or c. of this section shall submit an application to the director for tentative approval of the credit provided for in subsection b. or c. of this section between September 1 and October 31 of the year preceding the taxable year for which the credit is to be allowed. The director shall promulgate rules and forms on which the application shall be submitted. Amounts specified on an application shall not be changed by the taxpayer after the application is approved by the director. The application shall certify that the taxpayer would not have incurred the eligible telecommute expenses mentioned therein but for the availability of the credit provided in this section. The director shall review the application and shall tentatively approve the application upon determining that it meets the requirements of this section.
(2) The director shall provide tentative approval of the applications meeting the requirements of this section by December 31st of the year in which the application was submitted. The aggregate amount of credits approved by the director for all qualified taxpayers under this section during a taxable year shall not exceed:
(a) $2,000,000 for credits earned in taxable years beginning on or after January 1, 2010, but before January 1, 2011; and
(b) $2,000,000 for credits earned in taxable years beginning on or after January 1, 2011, but before January 1, 2012.
(3) The division shall notify each taxpayer of the credits tentatively approved and allocated by December 31st of the year in which the application was submitted. If the credit amounts on the credit applications filed with the director exceed the maximum aggregate limit of credits under this subsection, then the credits shall be allocated among the taxpayers who filed an application on a pro rata basis based upon the amounts otherwise allowed in this section. Once the credit application has been approved and the amount approved has been communicated in writing to the applicant, the taxpayer may make purchases approved for the credit at any time during the taxable year following the approval of the application. The taxpayer may then apply the amount of the approved credit to the taxpayer's tax liability for the taxable year or taxable years for which the approved application applies.
e. The amount of the credits applied under subsection b. or c. of 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 tax liability 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 participating employee during the taxable year, bears to the taxpayer's entire gross income for that year. Credits allowed pursuant to this section shall be taken only after the taxpayer has taken all other credits allowed under section 2 of P.L.2000, c.80 (C.54A:4-7). The amount of the credit otherwise allowable under this section which cannot be applied to the tax imposed in a taxable year due to the limitations of this subsection may be carried over, if necessary, to the seven consecutive years following the taxable year for which the credit is allowed.
f. Notwithstanding any other law to the contrary, on or before December 31, 2011, for credits allowed in calendar year 2010, and on or before December 31, 2012, for credits allowed in calendar year 2011, the director shall prepare and transmit to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature a report disclosing the names and the amounts of credits claimed by taxpayers under the provisions of subsection b. or c. of this section.
3. This act shall take effect immediately.
STATEMENT
This bill provides a corporation business tax and a gross income tax credit for certain costs incurred by businesses in the development and implementation of telecommute programs which eliminate or substantially reduce an employee's physical commute to and from an employer's principal place of business.
Under the provisions of the bill, taxpayers are allowed a credit in an amount equal to a percentage of the eligible telecommute expenses, up to a limit of $1,200, for each employee participating in a telecommute program. For purposes of the credit, percentages are determined based on the number of days per month participating employees telecommute; taxpayers are eligible to receive 50% of the eligible telecommute expenses incurred under a telecommute agreement which requires participating employees to telecommute not less than five days per month, and are eligible to receive 100% of the eligible telecommute expenses incurred under a telecommute agreement which requires participating employees to telecommute not less than 12 days per month.
Eligible telecommute expenses are defined by the bill as expenses incurred by taxpayers which enable participating employees to telecommute. They include, but are not limited to expenses paid or incurred to purchase: computers, computer related hardware and software, modems, data processing equipment, telecommunications equipment, high-speed Internet connectivity equipment, computer security software and devices, and any associated delivery, installation, or maintenance charges and fees.
In addition, the bill provides a separate tax credit, of not more than $20,000 per taxpayer, for certain costs incurred by taxpayers in the performance of a telecommute assessment. Under the bill, a telecommute assessment includes, but is not limited to: a workforce profile, a telecommute program business case and plan, a detailed accounting of the purpose, goals, and operating procedures of the telecommute program, methodologies for measuring telecommute program activities and achievements, and a schedule for increasing telecommute activity.
The bill caps the total, combined amount of credits awarded to taxpayers over the two year period the credits remain in effect. Under the corporation business tax, the aggregate amount of credits approved for all taxpayers may not exceed $2,000,000 for credits earned in privilege periods beginning on or after January 1, 2010, but before January 1, 2011, and may not exceed $2,000,000 for credits earned in privilege periods beginning on or after January 1, 2011, but before January 1, 2012. Similarly, under the gross income tax, the aggregate amount of credits may not exceed $2,000,000 for credits earned in taxable years beginning on or after January 1, 2010, but before January 1, 2011, and may not exceed $2,000,000 for credits earned in taxable years beginning on or after January 1, 2011, but before January 1, 2012. In either year, if the credit amounts under the corporation business tax or the gross income tax exceed the maximum aggregate limits, the bill stipulates that the credits must be allocated among taxpayers on a pro rata basis.
Collectively, the credits provided by this bill are intended to address concerns related to global warming and to encourage the conservation of energy in the State of New Jersey. Currently, one of the largest sources of pollution in this State, and throughout the United States, is derived from motor vehicle emissions. Telecommuting reduces traffic congestion and motor vehicle emissions, and provides energy savings in on-site heating and cooling, lighting, motor vehicle repair and maintenance, and highway construction and maintenance. The reduction in travel time for employees who telecommute also helps limit the demand for fossil fuels and encourages related cost savings associated with its consumption.
