Bill Text: NJ S2964 | 2020-2021 | Regular Session | Introduced


Bill Title: Establishes restricted beer, wine, and cider license; provides tax credit under corporate business tax and gross income tax for loss in value to certain alcoholic beverage licenses.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2020-09-24 - Introduced in the Senate, Referred to Senate Law and Public Safety Committee [S2964 Detail]

Download: New_Jersey-2020-S2964-Introduced.html

SENATE, No. 2964

STATE OF NEW JERSEY

219th LEGISLATURE

 

INTRODUCED SEPTEMBER 24, 2020

 


 

Sponsored by:

Senator  VIN GOPAL

District 11 (Monmouth)

 

 

 

 

SYNOPSIS

     Establishes restricted beer, wine, and cider license; provides tax credit under corporate business tax and gross income tax for loss in value to certain alcoholic beverage licenses.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning alcoholic beverage licensing, amending R.S.33:1-12 and P.L.1999, c.90, and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and chapter 4 of Title 54A of the New Jersey Statutes.

 

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

 

     1.    R.S.33:1-12 is amended to read as follows:

     33:1-12.  Class C licenses shall be subdivided and classified as follows:

     Plenary retail consumption license.  1.  The holder of this license shall be entitled, subject to rules and regulations, to sell any alcoholic beverages for consumption on the licensed premises by the glass or other open receptacle, and also to sell any alcoholic beverages in original containers for consumption off the licensed premises; but this license shall not be issued to permit the sale of alcoholic beverages in or upon any premises in which a grocery, delicatessen, drug store or other mercantile business is carried on, except as hereinafter provided.  The holder of this license shall be permitted to conduct consumer wine, beer and spirits tasting events and samplings for a fee or on a complimentary basis pursuant to conditions established by rules and regulations of the Division of Alcoholic Beverage Control, provided however, that the holder of this license complies with the terms and conditions set forth in section 3 of P.L.2009, c.216 (C.33:1-12d).  Subject to such rules and regulations established from time to time by the director, the holder of this license shall be permitted to sell alcoholic beverages in or upon the premises in which any of the following is carried on:  the keeping of a hotel or restaurant including the sale of mercantile items incidental thereto as an accommodation to patrons; the sale, at an entertainment facility as defined in R.S.33:1-1, having a seating capacity for no less than 4,000 patrons, of mercantile items traditionally associated with the type of event or program held at the site; the sale of distillers', brewers' and vintners' packaged merchandise prepacked as a unit with other suitable objects as gift items to be sold only as a unit; the sale of novelty wearing apparel identified with the name of the establishment licensed under the provisions of this section; the sale of cigars, cigarettes, packaged crackers, chips, nuts and similar snacks and ice at retail as an accommodation to patrons, or the retail sale of nonalcoholic beverages as accessory beverages to alcoholic beverages; or, in commercial bowling establishments, the retail sale or rental of bowling accessories and the retail sale from vending machines of candy, ice cream and nonalcoholic beverages.  The fee for this license shall be fixed by the governing board or body of the municipality in which the licensed premises are situated, by ordinance, at not less than $250 and not more than $2,500. No ordinance shall be enacted which shall raise or lower the fee to be charged for this license by more than 20% from that charged in the preceding license year or $500.00, whichever is the lesser.  The governing board or body of each municipality may, by ordinance, enact that no plenary retail consumption license shall be granted within its respective municipality.

     The holder of this license shall be permitted to obtain a restricted brewery license issued pursuant to subsection 1c. of R.S.33:1-10 and to operate a restricted brewery immediately adjoining the licensed premises in accordance with the restrictions set forth in that subsection.  All fees related to the issuance of both licenses shall be paid in accordance with statutory law.

     Seasonal retail consumption license.  2.  (1)  The holder of this license shall be entitled, subject to rules and regulations, to sell any alcoholic beverages for consumption on the licensed premises by the glass or other open receptacle, and also to sell any alcoholic beverages in original containers for consumption off the licensed premises, during the summer season from May 1 until November 14, inclusive, or during the winter season from November 15 until April 30, inclusive.

     (2)   In addition, the director shall issue to the holder of this license, upon request by the licensee, one-day permits that shall entitle the license holder to sell alcoholic beverages for consumption on the licensed premises during the season when the license holder is not authorized to sell alcoholic beverages pursuant to subparagraph (1) of this subsection.  The number of one-day permits issued to a licensee pursuant to this subsection shall not exceed an aggregate of 14 permits in one calendar year.  A one-day permit issued pursuant to this subsection shall be valid for 24 consecutive hours.  The fee for each one-day permit shall be $500.

     The governing body of the municipality in which the licensed premises is situated may place reasonable conditions upon a one-day permit for the purpose of maintaining public safety on the licensed premises and immediately surrounding area.  The costs associated with the reasonable conditions placed on the one-day permit shall be assumed by the holder of this license.

     (3)   This license shall not be issued to permit the sale of alcoholic beverages in or upon any premises in which a grocery, delicatessen, drug store or other mercantile business is carried on, except as hereinafter provided.  Subject to such rules and regulations established from time to time by the director, the holder of this license shall be permitted to sell alcoholic beverages in or upon the premises in which any of the following is carried on:  the keeping of a hotel or restaurant including the sale of mercantile items incidental thereto as an accommodation to patrons; the sale of distillers', brewers' and vintners' packaged merchandise prepacked as a unit with other suitable objects as gift items to be sold only as a unit; the sale of novelty wearing apparel identified with the name of the establishment licensed under the provisions of this section; the sale of cigars, cigarettes, packaged crackers, chips, nuts and similar snacks and ice at retail as an accommodation to patrons; or the retail sale of nonalcoholic beverages as accessory beverages to alcoholic beverages.  The fee for this license shall be fixed by the governing board or body of the municipality in which the licensed premises are situated, by ordinance, at 75% of the fee fixed by said board or body for plenary retail consumption licenses.  The governing board or body of each municipality may, by ordinance, enact that no seasonal retail consumption license shall be granted within its respective municipality.

     Plenary retail distribution license.  3.  a.  The holder of this license shall be entitled, subject to rules and regulations, to sell any alcoholic beverages for consumption off the licensed premises, but only in original containers; except that licensees shall be permitted to conduct consumer wine, beer, and spirits tasting events and samplings on a complimentary basis pursuant to conditions established by rules and regulations of the Division of Alcoholic Beverage Control, provided however, that the holder of this license complies with the terms and conditions set forth in section 3 of P.L.2009, c.216 (C.33:1-12d).

     The governing board or body of each municipality may, by ordinance, enact that this license shall not be issued to permit the sale of alcoholic beverages in or upon any premises in which any other mercantile business is carried on, except that any such ordinance, heretofore or hereafter adopted, shall not prohibit the retail sale of distillers', brewers' and vintners' packaged merchandise prepacked as a unit with other suitable objects as gift items to be sold only as a unit; the sale of novelty wearing apparel identified with the name of the establishment licensed under the provisions of this act; cigars, cigarettes, packaged crackers, chips, nuts and similar snacks, ice, and nonalcoholic beverages as accessory beverages to alcoholic beverages.  The fee for this license shall be fixed by the governing board or body of the municipality in which the licensed premises are situated, by ordinance, at not less than $125 and not more than $2,500.  No ordinance shall be enacted which shall raise or lower the fee to be charged for this license by more than 20% from that charged in the preceding license year or $500.00, whichever is the lesser.  The governing board or body of each municipality may, by ordinance, enact that no plenary retail distribution license shall be granted within its respective municipality.

     Limited retail distribution license.  3.  b.  The holder of this license shall be entitled, subject to rules and regulations, to sell any unchilled, brewed, malt alcoholic beverages in quantities of not less than 72 fluid ounces for consumption off the licensed premises, but only in original containers; provided, however, that this license shall be issued only for premises operated and conducted by the licensee as a bona fide grocery store, meat market, meat and grocery store, delicatessen, or other type of bona fide food store at which groceries or other foodstuffs are sold at retail; and provided further that this license shall not be issued except for premises at which the sale of groceries or other foodstuffs is the primary and principal business and at which the sale of alcoholic beverages is merely incidental and subordinate thereto.  The fee for this license shall be fixed by the governing body or board of the municipality in which the licensed premises are situated, by ordinance, at not less than $31 and not more than $63.  The governing board or body of each municipality may, by ordinance, enact that no limited retail distribution license shall be granted within its respective municipality.

     Plenary retail transit license.  4.  The holder of this license shall be entitled, subject to rules and regulations, to sell any alcoholic beverages, for consumption only, on railroad trains, airplanes, limousines and boats, while in transit.  The fee for this license for use by a railroad or air transport company shall be $375, for use by the owners of limousines shall be $31 per vehicle, and for use on a boat shall be $63 on a boat 65 feet or less in length, $125 on a boat more than 65 feet in length but not more than 110 feet in length, and $375 on a boat more than 110 feet in length; such boat lengths shall be determined in the manner prescribed by the Bureau of Customs of the United States Government or any federal agency successor thereto for boat measurement in connection with issuance of marine documents. A license issued under this provision to a railroad or air transport company shall cover all railroad cars and planes operated by any such company within the State of New Jersey.  A license for a boat or limousine issued under this provision shall apply only to the particular boat or limousine for which issued, and shall permit the purchase of alcoholic beverages for sale or service in a boat or limousine to be made from any Class A and B licensee or from any Class C licensee whose license privilege permits the sale of alcoholic beverages in original containers for off-premises consumption.  An interest in a plenary retail transit license issued in accordance with this section shall be excluded in determining the maximum number of retail licenses permitted under P.L.1962, c.152 (C.33:1-12.31 et seq.).

     Club license.  5.  The holder of this license shall be entitled, subject to rules and regulations, to sell any alcoholic beverages but only for immediate consumption on the licensed premises and only to bona fide club members and their guests.  The fee for this license shall be fixed by the governing board or body of the municipality in which the licensed premises are situated, by ordinance, at not less than $63 and not more than $188.  The governing board or body of each municipality may, by ordinance, enact that no club licenses shall be granted within its respective municipality.  Club licenses may be issued only to such corporations, associations and organizations as are operated for benevolent, charitable, fraternal, social, religious, recreational, athletic, or similar purposes, and not for private gain, and which comply with all conditions which may be imposed by the Director of the Division of Alcoholic Beverage Control by rules and regulations.

     The provisions of section 23 of P.L.2003, c.117 amendatory of this section shall apply to licenses issued or transferred on or after July 1, 2003, and to license renewals commencing on or after July 1, 2003.

     Sporting facility license.  6.  The holder of this license shall be entitled, subject to rules and regulations, to sell at retail or to serve any alcoholic beverages as the owner, operator, lessee, or concessionaire of a sporting facility by the glass or other receptacle or in original containers only on the premises of the sporting facility.

     Notwithstanding any other provision of Title 33 of the Revised Statutes and subject to conditions established by the director, the holder of this license may share direction and control of the premises to be licensed and share proceeds and profits from the sale of alcoholic beverages with the owner, operator, concessionaire, or lessee of the facility.  The holder of this license shall be permitted to conduct consumer wine, beer, and spirits tasting events and samplings for a fee or on a complimentary basis provided, however, the license holder complies with the provisions of section 3 of P.L.2009, c.216 (C.33:1-12d) and rules and regulations promulgated thereto.  Notwithstanding any law, rule or regulation to the contrary, the holder of this license shall be entitled to establish an all-inclusive area within the licensed sporting facility, provided the all-inclusive area is limited to one area within the sporting facility for each game or event and the capacity of the all-inclusive area does not exceed 500 persons.

     The fee for this license shall be $2,500 for venues with a capacity of less than 7,500 persons; $5,000 for venues with a capacity of not less than 7,500 persons but not more than 14,999 persons; $7,500 for venues with a capacity of not less than 15,000 persons but not more than 22,499 persons; and $10,000 for venues with a capacity of 22,500 persons or more.

     For the purposes of this subsection:

     "Sporting facility" means a stadium, arena, team training facility, or similar venue located on public property where alcoholic beverages are served or sold at retail for consumption on the premises by the glass or other open receptacle or in original containers.

     "Team training facility" shall include team offices and team headquarters.

     Restricted beer, wine, and cider license.  7.  The holder of this license shall be entitled, subject to rules and regulations, to sell any malt alcoholic beverage, wine, or cider by the glass or other open receptacle in or upon the premises of a restaurant with a full-service kitchen regularly and principally used for the purpose of providing food to customers.

The holder of this license only shall sell alcoholic beverages in connection with the sale of food and served at a table by an employee of the restaurant.  The holder of this license shall not provide a bar area for customers of the restaurant to congregate and consume alcoholic beverages, but may provide a service bar at which alcoholic beverages are prepared for service to customers at a table.  An employee of the restaurant may be stationed at the service bar to prepare drinks for customers, but only shall transfer alcoholic beverages to wait staff employed by the restaurant to be delivered to restaurant patrons who are seated or are waiting to be seated at a table; an employee preparing drinks at the service bar shall be prohibited from directly transferring alcoholic beverages to restaurant patrons.

     The holder of this license may not sell or transfer the license.  The governing board or body of the municipality shall not limit the number of restricted beer, wine, and cider licenses issued within the municipality, and the restriction in section 2 of P.L.1947, c.94 (C.33:1-12.14) concerning the number of retail consumption licenses that may be issued in a municipality shall not be applicable to the license issued under this paragraph.  A municipality that prohibits the sale of alcoholic beverages within its borders may establish by ordinance or resolution that a restricted beer and wine license may be issued in the municipality.

     The initial fee and annual renewal fee for this license shall be: $2,000 until the first day of the 25th month following the date of enactment of P.L.     , c.    (pending before the Legislature as this bill); $3,000 until the first day of the 61st month following the date of enactment of P.L.     , c.    (pending before the Legislature as this bill); and $5,000 thereafter.  

     In addition, the holder of a restricted beer, wine, and cider license shall pay upon renewal of the license any applicable renewal fees which are otherwise required to be paid to the Director of the Division of Alcoholic Beverage Control by the holder of a plenary retail consumption license.

     The provisions of section 23 of P.L.2003, c.117 amendatory of this section shall apply to licenses issued or transferred on or after July 1, 2003, and to license renewals commencing on or after July 1, 2003.

(cf:  P.L.2018, c.147, s.1) 

 

     2.    Section 5 of P.L.1999, c.90 (C.2C:33-27) is amended to read as follows:

     5.    Consumption of alcohol in restaurants.

     a.     [No] A person who owns or operates a restaurant, dining room or other public place where food or liquid refreshments are sold or served to the general public, and for which premises a license or permit authorizing the sale of alcoholic beverages for on-premises consumption has not been issued shall not:

     (1)   [Shall] allow the consumption of alcoholic beverages, other than wine or a malt alcoholic beverage, in a portion of the premises which is open to the public; [or]

     (2)   [Shall] charge any admission fee or cover, corkage, or service charge [or advertise inside or outside of such premises that patrons may bring and consume their own wine or malt alcoholic beverages in a portion of the premises which is open to the public.] , except as provided in subsection d. of this section; or

     (3)   [Shall] allow the consumption of wine or malt alcoholic beverages at times or by persons to whom the service or consumption [or] of alcoholic beverages on a licensed premises is prohibited by State or municipal law or regulation.

     b.    Nothing in this act shall restrict the right of  a municipality or an owner or operator of a restaurant, dining room or other public place where food or liquid refreshments are sold or served to the general public from prohibiting the consumption of alcoholic beverages on those premises.

     c.     A person who violates any provision of this act is a disorderly person, and the court, in addition to the sentence imposed for the disorderly person violation, may by its judgment bar the owner or operator from allowing consumption of wine or malt alcoholic beverages in his premises as authorized by this act.

     d.    Notwithstanding the provisions of paragraph (2) of subsection a. of this section, the holder of a restricted beer, wine, and cider license issued pursuant to R.S.33:1-12 may charge a corkage fee for patrons who bring and consume their own malt alcoholic beverages, wine, or cider on the licensed premises which is open to the public.

(cf: P.L.1999, c.90, s.5)

 

     3.    (New section)  a.  A taxpayer that is certified as a qualified holder of a plenary retail consumption license shall be allowed a credit against the corporation business tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5).  The amount of the credit shall be equal to 50 percent of the purchase price of the taxpayer's license prior to the date of enactment of P.L.    , c.    (C.        ) (pending before the Legislature as this bill), and shall be taken over a 10 year period, in 10 annual installments, at the rate of one-tenth the total amount of the taxpayer's credit for each privilege period of the taxpayer, beginning with the privilege period in which the taxpayer is certified as a qualified holder of a plenary retail consumption license by the Director of the Division of Alcoholic Beverage Control in the Department of Law and Public Safety in accordance with subsection b. of this section.   

     b.    (1)  To be certified as a qualified holder of a plenary retail consumption license, a taxpayer shall make and file an application for certification with the Director of the Division of Alcoholic Beverage Control within 360 days of the effective date of P.L.    , c.    (C.        ) (pending before the Legislature as this bill). The application shall be made on forms furnished by the Director of the Division of Alcoholic Beverage Control, and shall require the taxpayer to demonstrate: the location of the premises operated in connection with the license; the original amount paid by the taxpayer for the privilege of holding the license; and the purpose to which the license has been used by the taxpayer.

     (2)   The Director of the Division of Alcoholic Beverage Control shall review each application made and filed in accordance with paragraph (1) of this subsection and make a determination regarding the issuance of a certification within 180 days of the date a complete application is filed.  The determination shall be made based upon the Director of the Division of Alcoholic Beverage Control's finding that: the taxpayer acquired the license prior to the date of enactment of P.L.    , c.    (pending before the Legislature as this bill) and the license is used directly by the taxpayer to sell alcoholic beverages for consumption on a licensed premises in accordance with the provisions of R.S.33:1-12. 

     (3)   The Director of the Division of Alcoholic Beverage Control shall issue a written certification to each taxpayer that has made and filed an application that has been reviewed and approved in accordance with paragraph (2) of this subsection within 10 days of the date the determination is made. Each taxpayer issued a certification shall include a copy of the written certification, along with the detailed explanation of the sale price of the taxpayer's license, when filing a return that includes a claim for the credit allowed in accordance with this section.

     (4)   The Director of the Division of Alcoholic Beverage Control shall provide a copy of each written certification issued in accordance with paragraph (4) of this subsection to the Director of the Division of Taxation in the Department of the Treasury within 10 days of the date the certification is issued, and shall prepare a report regarding the administration of the certification process established in accordance with this subsection.  The report shall specify: the number of applications made and filed; the number of certifications issued; and the fair market value of each license for which a certification is issued.  The report shall be submitted to the Governor, the State Treasurer, and the Legislature, in accordance with section 2 of P.L.1991, c.164 (C.52:14-19.1), within 450 days of the effective date of P.L.    , c.    (C.         ) (pending before the Legislature as this bill).   

     c.     The order of priority of the application of an annual installment of the credit allowed pursuant to this section and any other credit allowed against the corporation business tax for a privilege period shall be as prescribed by the Director of the Division of Taxation in the Department of the Treasury. The amount of an annual installment of the credit applied under this section against the corporation business tax for a privilege period, together with any other annual installment and any other credits allowed against the corporation business tax, shall not reduce the tax liability of the taxpayer to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5).  The amount of an annual installment of the credit allowable under this section which cannot be applied for a privilege period due to the limitations of this subsection may be carried forward, if necessary, to the earliest available use within the 20 privilege periods immediately following the privilege period for which the credit is allowed.  

     d.    A taxpayer may, upon issuance of a certification as a qualified holder of a plenary retail consumption license by the Director of the Division of Alcoholic Beverage Control in accordance with subsection b. of this section, make and file an application to the Director of the Division of Taxation for a tax credit transfer certificate in lieu of the taxpayer being allowed an annual installment of the credit or any amount of an annual installment of the credit that may be taken against the corporation business tax liability of the taxpayer. The Director of the Division of Taxation may prescribe the form and manner by which a taxpayer may make and file a separate application in connection with each annual installment of the credit or any amount of each annual installment of the credit, and may consult with the Director of the Division of Alcoholic Beverage Control in reviewing and approving any application for a tax credit transfer certificate of a taxpayer.  The tax credit transfer certificate, upon issuance thereof by the Director of the Division of Taxation, may be sold or assigned, in whole or in part, to any other taxpayer that may have a corporation business tax or a gross income tax liability, in exchange for private financial assistance to be provided by the purchaser or assignee to the taxpayer that is allowed a credit under this section.

     The certificate issued to the taxpayer shall include a statement waiving the taxpayer's right to claim that amount of the annual installment of the credit against the corporation business tax that the taxpayer has elected to sell or assign. The sale or assignment of any amount of a tax credit transfer certificate allowed under this subsection shall not be exchanged for consideration received by the taxpayer of less than 75 percent of the transferred credit amount. Any amount of a tax credit transfer certificate used by a purchaser or assignee against a corporation business tax liability shall be subject to the same limitations and conditions that apply to the use of a credit pursuant to subsection c. of this section. Any amount of a tax credit transfer certificate obtained by a purchaser or assignee under this section may be applied against the purchaser's or assignee's gross income tax liability and shall be subject to the same limitations and conditions that apply to the use of a credit pursuant to subsection c. of section 7 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill).

     e.     (1)  If, in the 10 year period beginning with the privilege period in which the taxpayer is certified as a qualified holder of a plenary retail consumption license, the taxpayer sells or transfers any part of the taxpayer's interest in the license to another person, the taxpayer shall forfeit that portion of the taxpayer's credit that is equal to the amount of consideration received by the taxpayer from the sale or transfer of the license. The forfeited portion shall first reduce the balance of any annual installment of a credit of the taxpayer that is allowed but that has not been applied against the tax liability of the taxpayer, or converted into a tax credit transfer certificate and sold or assigned to another taxpayer in accordance with subsection d. of this section, during the privilege period in which the sale or transfer of the license occurs, and then shall reduce the balance of any future annual installment of a credit of a taxpayer that is allowed but that has not been applied, or converted and sold or assigned to another taxpayer, beginning with future annual installments allowed during the privilege period immediately following the privilege period in which the sale or transfer occurs. If, after being used to reduce future annual installments, the forfeited portion exceeds the amount of any allowable credit remaining, the taxpayer shall repay the amount of that excess to the Director of the Division of Taxation; provided however, that if the taxpayer converted an annual installment of the credit or any amount of an annual installment of the credit into a tax credit transfer certificate in accordance with subsection d. of this section, the amount of the excess required to be repaid to the Director of the Division of Taxation shall be reduced, if necessary, in proportion to the amount of consideration received by the taxpayer from the sale or assignment of the tax credit transfer certificate. 

 

     4.    (New section)  a.  A taxpayer that is certified as a qualified holder of a plenary retail consumption license shall be allowed a credit against the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.  The amount of the credit shall be equal to 50 percent of the purchase price of the taxpayer's license prior to the date of enactment of P.L.    , c.    (C.        ) (pending before the Legislature as this bill), and shall be taken over a 10 year period, in 10 annual installments, at the rate of one-tenth the total amount of the taxpayer's credit for each privilege period of the taxpayer, beginning with the privilege period in which the taxpayer is certified as a qualified holder of a plenary retail consumption license by the Director of the Division of Alcoholic Beverage Control in the Department of Law and Public Safety in accordance with subsection b. of this section.   

     b.    (1)  To be certified as a qualified holder of a plenary retail consumption license, a taxpayer shall make and file an application for certification with the Director of the Division of Alcoholic Beverage Control within 360 days of the effective date of P.L.    , c.    (C.        ) (pending before the Legislature as this bill). The application shall be made on forms furnished by the Director of the Division of Alcoholic Beverage Control, and shall require the taxpayer to demonstrate: the location of the premises operated in connection with the license; the original amount paid by the taxpayer for the privilege of holding the license; and the purpose to which the license has been used by the taxpayer.

     (2)   The Director of the Division of Alcoholic Beverage Control shall review each application made and filed in accordance with paragraph (1) of this subsection and make a determination regarding the issuance of a certification within 180 days of the date a complete application is filed.  The determination shall be made based upon the Director of the Division of Alcoholic Beverage Control's finding that: the taxpayer acquired the license following the date of enactment of P.L.    , c.    (pending before the Legislature as this bill) and the license is used directly by the taxpayer to sell alcoholic beverages for consumption on a licensed premises in accordance with the provisions of R.S.33:1-12. 

     (3)   The Director of the Division of Alcoholic Beverage Control shall issue a written certification to each taxpayer that has made and filed an application that has been reviewed and approved in accordance with paragraph (2) of this subsection within 10 days of the date the determination is made. Each taxpayer issued a certification shall include a copy of the written certification, along with the detailed explanation of the sale price of the taxpayer's license, when filing a return that includes a claim for the credit allowed in accordance with this section.

     (4)   The Director of the Division of Alcoholic Beverage Control shall provide a copy of each written certification issued in accordance with paragraph (4) of this subsection to the Director of the Division of Taxation in the Department of the Treasury within 10 days of the date the certification is issued, and shall prepare a report regarding the administration of the certification process established in accordance with this subsection.  The report shall specify: the number of applications made and filed; the number of certifications issued; and the fair market value of each license for which a certification is issued.  The report shall be submitted to the Governor, the State Treasurer, and the Legislature, in accordance with section 2 of P.L.1991, c.164 (C.52:14-19.1), within 450 days of the effective date of P.L.    , c.    (C.         ) (pending before the Legislature as this bill).   

     c.     The order of priority of the application of an annual installment of the credit allowed pursuant to this section and any other credit allowed against the corporation business tax for a privilege period shall be as prescribed by the Director of the Division of Taxation.  The amount of an annual installment of the credit applied under this section against the corporation business tax for a privilege period, together with any other annual installment and any other credits allowed against the corporation business tax, shall not reduce the tax liability of the taxpayer to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5).  The amount of an annual installment of the credit allowable under this section which cannot be applied for a privilege period due to the limitations of this subsection may be carried forward, if necessary, to the earliest available use within the 20 privilege periods immediately following the privilege period for which the credit is allowed.  

     d.    A taxpayer may, upon issuance of a certification as a qualified holder of a plenary retail consumption license by the Director of the Division of Alcoholic Beverage Control in accordance with subsection b. of this section, make and file an application to the Director of the Division of Taxation for a tax credit transfer certificate in lieu of the taxpayer being allowed an annual installment of the credit or any amount of an annual installment of the credit that may be taken against the corporation business tax liability of the taxpayer. The Director of the Division of Taxation may prescribe the form and manner by which a taxpayer may make and file a separate application in connection with each annual installment of the credit or any amount of each annual installment of the credit, and may consult with the Director of the Division of Alcoholic Beverage Control in reviewing and approving any application for a tax credit transfer certificate of a taxpayer.  The tax credit transfer certificate, upon issuance thereof by the Director of the Division of Taxation, may be sold or assigned, in whole or in part, to any other taxpayer that may have a corporation business tax or a gross income tax liability, in exchange for private financial assistance to be provided by the purchaser or assignee to the taxpayer that is allowed a credit under this section.

     The certificate issued to the taxpayer shall include a statement waiving the taxpayer's right to claim that amount of the annual installment of the credit against the corporation business tax that the taxpayer has elected to sell or assign. The sale or assignment of any amount of a tax credit transfer certificate allowed under this subsection shall not be exchanged for consideration received by the taxpayer of less than 75 percent of the transferred credit amount. Any amount of a tax credit transfer certificate used by a purchaser or assignee against a corporation business tax liability shall be subject to the same limitations and conditions that apply to the use of a credit pursuant to subsection c. of this section. Any amount of a tax credit transfer certificate obtained by a purchaser or assignee under this section may be applied against the purchaser's or assignee's gross income tax liability and shall be subject to the same limitations and conditions that apply to the use of a credit pursuant to subsection c. of section 4 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill).

     e.     (1)  If, in the 10 year period beginning with the privilege period in which the taxpayer is certified as a qualified holder of a plenary retail consumption license, the taxpayer sells or transfers any part of the taxpayer's interest in the license to another person, the taxpayer shall forfeit that portion of the taxpayer's credit that is equal to the amount of consideration received by the taxpayer from the sale or transfer of the license. The forfeited portion shall first reduce the balance of any annual installment of a credit of the taxpayer that is allowed but that has not been applied against the tax liability of the taxpayer, or converted into a tax credit transfer certificate and sold or assigned to another taxpayer in accordance with subsection d. of this section, during the privilege period in which the sale or transfer of the license occurs, and then shall reduce the balance of any future annual installment of a credit of a taxpayer that is allowed but that has not been applied, or converted and sold or assigned to another taxpayer, beginning with future annual installments allowed during the privilege period immediately following the privilege period in which the sale or transfer occurs. If, after being used to reduce future annual installments, the forfeited portion exceeds the amount of any allowable credit remaining, the taxpayer shall repay the amount of that excess to the Director of the Division of Taxation; provided however, that if the taxpayer converted an annual installment of the credit or any amount of an annual installment of the credit into a tax credit transfer certificate in accordance with subsection d. of this section, the amount of the excess required to be repaid to the Director of the Division of Taxation shall be reduced, if necessary, in proportion to the amount of consideration received by the taxpayer from the sale or assignment of the tax credit transfer certificate. 

 

     5.    This act shall take effect on the first day of the nineteenth month following enactment.

 

 

STATEMENT

 

     This bill establishes a restricted alcoholic beverage license that allows the licensee to sell beer, wine, and cider by the glass or other open receptacle on the premises of a restaurant with a full service kitchen. 

     The holder of a beer, wine, and cider license only would be entitled to sell alcoholic beverages in connection with the sale of food and served at a table by an employee of the restaurant.  Under the bill, the licensee would be prohibited from providing a bar area for restaurant customers to congregate and consume alcoholic beverages.  However, the licensee may provide a service bar at which alcoholic beverages are prepared for service to customers at a table. 

Under current law, a municipality may issue plenary retail consumption licenses until the combined total number in the municipality is fewer than one license for each 3,000 municipal residents.  Because of this restriction, there is a shortage of these licenses in some municipalities. This bill addresses this shortage by allowing a municipality to issue these limited beer, wine, and cider licenses.  The bill prohibits a municipal governing body from limiting the number of these licenses that may be issued.  A municipality that prohibits the sale of alcoholic beverages within its borders-also known as a dry town-may establish by ordinance that the beer, wine, and cider license may be issued in the municipality.  The licenses would be non-transferable. 

The initial and annual renewal fee for the license would be:

1) $2,000 until the two years following the date of bill's enactment;

2) $3,000 until five years following the date of the bill's enactment; and

3) $5,000 after five years following the date of the bill's enactment.  

In addition, the bill allows the licensee to charge a service or corkage fee to patrons who bring their own beer, wine, or cider for consumption on the licensed premises.  The bill also removes the prohibition on advertising that a restaurant is BYOB in response to a recent decision by the United States District Court for the District of New Jersey, GJJM Enterprises, LLC v. City of Atlantic City, holding that the State's prohibition on BYOB advertising is an unconstitutional violation of the First Amendment right to free speech.

This bill also provides a tax credit against the corporation business tax and gross income tax to compensate license holders for the expected loss in value resulting from the creation of the new restricted licenses.  Under the bill, the tax credit is equal to 50 percent of the purchase price of taxpayer's plenary retail consumption license.  The tax credit is required to be taken over a 10 year period, in 10 annual installments, at the rate of 1/20 the total amount of the taxpayer's allowable credit.

     The bill permits qualified license holders to convert allowable tax credits to tax credit transfer certificates upon application to and approval by the Director of the Division of Taxation in the Department of the Treasury.  The bill authorizes qualified license holders to sell any amount of the credit that is converted to a tax credit transfer certificate to another taxpayer in exchange for private financial consideration, but stipulates that the consideration received by the qualified license holder from the sale cannot be less than 75 percent of the transferred credit amount. 

     The bill provides that a qualified license holder who is allowed a credit is permitted to maintain the plenary retail consumption license and operate a licensed premises in this State.  However, the bill provides that taxpayers who sell their interest in the consumption license during the 10 year tax period in which they are eligible to receive annual installments of the credit, must forfeit that portion of the qualified licensee's credit that is equal to the amount of consideration received from the sale or transfer of the license. The bill provides that the forfeited amount will reduce any unused credit of the taxpayer that has not been used, sold, or assigned to another taxpayer and, if after the forfeited amount is used to reduce any allowable credit of the taxpayer, the balance of the forfeited portion remaining must be repaid to the Director of the Division of Taxation. 

     Additionally, the bill provides that taxpayers who sell their interest in the consumption license during a 15 year period following the 10 year tax period in which they are eligible to receive annual installments of the credit, must similarly forfeit that portion of the qualified licensee's credit that is equal to the amount of consideration received from the sale or transfer of the license. The bill provides that the forfeited amount will reduce any tax credit carryover that is allowed but has not been used by the taxpayer, and, if after the forfeited amount is used to reduce any allowable credit of the taxpayer, the balance of the forfeited portion remaining must be repaid to the Director of the Division of Taxation, at reduced amounts based upon when the sale or transfer of the license occurs.     

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