Bill Text: NJ S1263 | 2012-2013 | Regular Session | Introduced
Bill Title: Allows corporation business tax credit and gross income tax credit for certain wages paid to qualified interns in tax years 2013 and 2014. *
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Introduced - Dead) 2013-02-07 - Substituted by A1271 [S1263 Detail]
Download: New_Jersey-2012-S1263-Introduced.html
Sponsored by:
Senator JOSEPH F. VITALE
District 19 (Middlesex)
Senator JIM WHELAN
District 2 (Atlantic)
SYNOPSIS
Allows corporation business tax credit and gross income tax credit for certain wages paid to qualified interns in tax years 2012 and 2013.
CURRENT VERSION OF TEXT
As introduced.
An Act allowing a corporation business tax credit and gross income tax credit for certain payments to qualified interns in tax years 2012 and 2013, 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. For privilege periods commencing on or after January 1, 2012 but before January 1, 2014, 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 40 percent of the value of the salaries, wages or other remuneration for services paid to a qualified intern or $600 of the salaries, wages or other remuneration for services paid to a qualified intern, whichever is less.
b. Notwithstanding the limitations of subsection a. of this section, the credit allowed pursuant to subsection a. of this section shall be increased by $75 per qualified intern for a taxpayer that employs three or more qualified interns for whom the credit pursuant to subsection a. of this section is allowed for the privilege period.
c. (1) To be eligible for the credit allowed pursuant to this section a taxpayer shall not employ fewer employees in the State, other than qualified interns, on the first day of the third month before the privilege period for which this credit is claimed than on the last day of the privilege period for which this credit is claimed.
(2) The credits allowed pursuant to this section and section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall not be allowed for more than 5,250 qualified interns per calendar year or 700 taxpayers, whichever limitation first applies.
(3) No credit shall be allowed pursuant to this section for a qualified intern that was employed by the taxpayer in the six months immediately preceding the commencement of employment as a qualified intern.
(4) A credit claimed pursuant to this section shall not be allowed unless the taxpayer submits an application and receives an initial approval in accordance with subsection d. of this section and complies with the filing requirements in accordance with subsection e. of this section.
d. (1) A taxpayer shall file an application with the Director of the Division of Taxation for an initial approval of a credit allowed pursuant to this section for each qualified intern for which the taxpayer claims a credit. In the application the taxpayer shall certify that the taxpayer would not have employed the qualified intern but substantially for the credit allowed pursuant to this section and that the taxpayer expects that the number of hours worked by qualified interns will increase in the privilege period for which the application is submitted compared to the immediately preceding privilege period.
(2) The director shall reject an initial approval pursuant to this subsection if that approval would exceed the limitations set forth in paragraph (2) of subsection c. Complete applications shall be applied against the limitations authorized pursuant to paragraph (2) of subsection c. in the order in which they are received. The director shall issue an initial approval or rejection within 90 days of receipt of an application made pursuant to this subsection. If the director fails to issue an initial approval or rejection within 90 days of receipt of an application, that application shall be deemed to have received initial approval, notwithstanding the limitations of paragraph (2) of subsection c. of this section.
(3) The commencement of the employment of a qualified intern prior to the receipt of an initial approval made pursuant to this section shall not preclude allowance of the credit claimed pursuant to this section.
e. A taxpayer having received an initial approval pursuant to subsection d. of this section shall file with their return an application for the credit allowed pursuant to this section. In the application the taxpayer shall certify that the qualified intern was employed and supervised in New Jersey in a position that provides training and experience to the individual in their chosen field of study, that the qualified intern was paid a wage of no less than $8.00 per hour for a term of employment that lasts at least 12 weeks and includes a minimum of 14 hours of service per week, the total hours and weeks worked by the qualified intern for the privilege period, the total compensation paid to the qualified intern for the privilege period, and the number of employees employed by the taxpayer other than qualified interns on the first day of the third month before the privilege period for which this credit is claimed and on the last day of the privilege period for which this credit is claimed.
f. (1) The director is authorized to adopt such rules and regulations that the director determines are necessary to administer this section, including but not limited to the form and manner of applications required by subsections d. and e. of this section. Rules and regulations deemed necessary by the director pursuant to this subsection shall be adopted in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
(2) The order of priority of the application of the credit allowed under this section and any other credits allowed by law shall be as prescribed by the director. The amount of the credit applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 for a privilege period, together with any other credits allowed against the tax imposed pursuant to section 5 of P.L.1945, c.162, shall not exceed 50% of the tax liability otherwise due and shall not reduce the tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162. An unused credit resulting from the limitations of this paragraph may be carried forward, if necessary, for use in the seven privilege periods following the privilege period for which the credit is allowed.
g. As used in this section:
"Qualified intern" means an individual enrolled and in good standing at a New Jersey four-year institution of higher education, a New Jersey county college, or a New Jersey accredited post-secondary business, technical, trade or vocational school, that is employed and supervised in New Jersey in a position that provides training and experience to the individual in their chosen field of study, and is paid a wage of no less than $8.00 per hour by the taxpayer during a term of employment that lasts at least 12 weeks and includes a minimum of 14 hours of service per week.
2. a. For taxable years commencing on or after January 1, 2012 but before January 1, 2014, a taxpayer operating a business as a sole proprietor or through a partnership shall be allowed a credit against the tax otherwise due pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to 40 percent of the value of the salaries, wages or other remuneration for services paid to a qualified intern or $600 of the salaries, wages or other remuneration for services paid to a qualified intern, whichever is less.
b. Notwithstanding the limitations of subsection a. of this section, the credit allowed pursuant to subsection a. of this section shall be increased by $75 per qualified intern for a taxpayer that employs three or more qualified interns for whom the credit pursuant to subsection a. of this section is allowed for the taxable year.
c. (1) To be eligible for the credit allowed pursuant to this section a taxpayer shall not employ fewer employees in the State, other than qualified interns, on the first day of the third month before the taxable year for which this credit is claimed than on the last day of the taxable year for which this credit is claimed.
(2) The credits allowed pursuant to this section and section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall not be allowed for more than 5,250 qualified interns per calendar year or 700 taxpayers, whichever limitation first applies.
(3) No credit shall be allowed pursuant to this section for a qualified intern that was employed by the taxpayer in the six months immediately preceding the commencement of employment as a qualified intern.
(4) A credit claimed pursuant to this section shall not be allowed unless the taxpayer submits an application and receives an initial approval in accordance with subsection d. of this section and complies with the filing requirements in accordance with subsection e. of this section.
d. (1) A taxpayer shall file an application with the Director of the Division of Taxation for an initial approval of a credit allowed pursuant to this section for each qualified intern for which the taxpayer claims a credit. In the application the taxpayer shall certify that the taxpayer's business would not have employed the qualified intern but substantially for the credit allowed pursuant to this section and that the taxpayer expects that the number of hours worked by qualified interns will increase in the taxable year for which the application is submitted compared to the immediately preceding taxable year.
(2) The director shall reject an initial approval pursuant to this subsection if that approval would exceed the limitations set forth in paragraph (2) of subsection c. Complete applications shall be applied against the limitations authorized pursuant to paragraph (2) of subsection c. in the order in which they are received. The director shall issue an initial approval or rejection within 90 days of receipt of an application made pursuant to this subsection. If the director fails to issue an initial approval or rejection within 90 days of receipt of an application, that application shall be deemed to have received initial approval, notwithstanding the limitations of paragraph (2) of subsection c. of this section.
(3) The commencement of the employment of a qualified intern prior to the receipt of an initial approval made pursuant to this section shall not preclude allowance of the credit claimed pursuant to this section.
e. A taxpayer having received an initial approval pursuant to subsection d. of this section shall file with their return an application for the credit allowed pursuant to this section. In the application the taxpayer shall certify that the qualified intern was employed and supervised in New Jersey in a position that provides training and experience to the individual in their chosen field of study, that the qualified intern was paid a wage of no less than $8.00 per hour for a term of employment that lasts at least 12 weeks and includes a minimum of 14 hours of service per week, the total hours and weeks worked by the qualified intern for the taxable year, the total compensation paid to the qualified intern for the taxable year, and the number of employees employed by the taxpayer other than qualified interns on the first day of the third month before the taxable year for which this credit is claimed and on the last day of the taxable year for which this credit is claimed.
f. A partnership shall not be allowed a credit under this section directly, but a partnership may file an application with the director for the credit allowed pursuant to this section. In the application the partnership shall certify that the qualified intern was employed and supervised in New Jersey in a position that provides training and experience to the individual in their chosen field of study, that the qualified intern was paid a wage of no less than $8.00 per hour for a term of employment that lasts at least 12 weeks and includes a minimum of 14 hours of service per week, the total hours and weeks worked by the qualified intern for the partnership taxable year, the total compensation paid to the qualified intern for the partnership taxable year, and the number of employees employed by the partnership other than qualified interns on the first day of the third month before the partnership taxable year for which this credit is claimed and on the last day of the partnership taxable year for which this credit is claimed. Upon the director's approval of this application, the amount of credit of a taxpayer in respect of a distributive share of partnership income under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., 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.
g. The director is authorized to adopt such rules and regulations that the director determines are necessary to administer this section, including but not limited to the form and manner of applications required by subsections d. and e. of this section. Rules and regulations deemed necessary by the director pursuant to this subsection shall be adopted in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
h. As used in this section:
"Qualified intern" means an individual enrolled and in good standing at a New Jersey four-year institution of higher education, a New Jersey county college, or a New Jersey accredited post-secondary business, technical, trade or vocational school, that is employed and supervised in New Jersey in a position that provides training and experience to the individual in their chosen field of study, and is paid a wage of no less than $8.00 per hour by the taxpayer during a term of employment that lasts at least 12 weeks and includes a minimum of 14 hours of service per week.
3. On or before January 1 of 2015 the Director of the Division of Taxation shall prepare and submit a report to the Governor and the Legislature, in accordance with section 2 of P.L.1991, c.164 (C.52:14-19.1), addressing the credits allowed pursuant to sections 1 and 2 of P.L. , c. (C. ) (pending before the Legislature as this bill). The report shall include the total value of credits allowed for each tax year, the total number of qualified interns for which a credit was allowed for each tax year, information on the division's experience in administering the credits allowed pursuant to sections 1 and 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) including but not limited to a description of increased workload associated with the credit, and an analysis as to the effectiveness of the credits as an incentive for encouraging the employment of qualified interns.
4. This act shall take effect immediately.
STATEMENT
The bill allows a corporation business tax credit (CBT) and gross income tax (GIT) credit for certain wages paid to qualified interns in tax years 2012 and 2013. The bill allows credits in amounts equal to 40% of compensation paid to qualified interns or $600 of that compensation, whichever is less. Taxpayers that employ three or more qualified interns in a tax year receive a $75 bonus per qualified intern. On an annual basis, the bill limits the combined credits under both the CBT and GIT to 5,250 qualified interns or 700 taxpayers, whichever limitation is triggered first.
The bill does not allow credit for an intern that was employed by the taxpayer in the six months immediately preceding the internship for which the credit is sought.
To secure a credit, the bill requires a taxpayer to file an initial application with the Director of the Division of Taxation to certify that, but substantially for the credit, the taxpayer would not have employed the qualified intern and that the taxpayer expects that the number of hours worked by qualified interns will increase compared to the previous taxable year. In reviewing the initial application, the director shall reject an initial approval if approval would violate the annual limits as to the number of qualified interns or taxpayers that may claim a credit. The bill requires the director to issue rejections and approvals of the initial applications within 90 days of receipt of an application, otherwise the initial application will be deemed approved regardless of the annual limitations. The employment of a qualified intern prior to the issuance of an initial approval does not preclude an allowance of the credit.
Having secured an initial approval from the director, the taxpayer is also required by the bill to file an application for the credit with its annual tax return. The application must include a certification denoting that the qualified intern was employed and supervised in New Jersey in a position that provides training and experience to the individual in the individual's chosen field of study, that the qualified intern was paid a wage of no less than $8.00 per hour for a term of employment that lasted at least 12 weeks and included a minimum of 14 hours of service per week, the total hours and weeks worked by the qualified intern in the tax year, the total compensation paid to the qualified intern in the tax year, and the number of employees employed by the taxpayer's business other than qualified interns on the first day of the third month before the tax year for which the credit is claimed and on the last day of the tax year for which the credit is claimed.
One year after the conclusion of the credit, the bill requires the director to deliver a report to the Governor and the Legislature which documents the value of credits allowed, the number of qualified interns which gave rise to credits, information on the division's experience administering the credit and an analysis as to the effectiveness of the credit as an incentive for encouraging the employment of qualified interns.
