Bill Text: NJ S3015 | 2020-2021 | Regular Session | Introduced


Bill Title: Provides temporary corporation business tax and gross income tax credits for job creation related to manufacturing of personal protective equipment.

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Engrossed - Dead) 2020-12-14 - Reported out of Assembly Committee, 2nd Reading [S3015 Detail]

Download: New_Jersey-2020-S3015-Introduced.html

SENATE, No. 3015

STATE OF NEW JERSEY

219th LEGISLATURE

 

INTRODUCED OCTOBER 19, 2020

 


 

Sponsored by:

Senator  STEPHEN M. SWEENEY

District 3 (Cumberland, Gloucester and Salem)

 

 

 

 

SYNOPSIS

     Provides temporary corporation business tax and gross income tax credits for job creation related to manufacturing of personal protective equipment.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act providing temporary corporation business tax and gross income tax credits for job creation related to manufacturing of personal protective equipment, supplementing P.L.1945, c.162 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 ending in 2020, 2021, and 2022, a taxpayer, upon approval of an application to the director, shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) in the amount of $10,000 for each qualifying new hire involved in the manufacture of personal protective equipment in a qualified facility in which the taxpayer made a capital investment during the privilege period.

     b.    The minimum capital investment in a qualified facility required to be eligible for a credit under this section shall be as follows:

     (1)   for the rehabilitation, improvement, fit-out, or retrofit of an existing premises in Atlantic County, Burlington County, Cape May County, Cumberland County, Gloucester County, Ocean County, or Salem County, a minimum investment of $10 per square foot of gross leasable area;

     (2)   for the rehabilitation, improvement, fit-out, or retrofit of an existing premises in counties in the State not listed in paragraph (1) of this subsection, a minimum investment of $20 per square foot of gross leasable area;

     (3)   for the new construction of a premises in Atlantic County, Burlington County, Cape May County, Cumberland County, Gloucester County, Ocean County, or Salem County, a minimum investment of $100 per square foot of gross leasable area; or

     (4)   for the new construction of a premises in counties in the State not listed in paragraph (3) of this subsection, a minimum investment of $120 per square foot of gross leasable area.

     c.     The minimum number of new or retained qualifying full-time jobs required to be eligible for a credit under this section shall be as follows:

     (1)   for a qualified facility in Atlantic County, Burlington County, Cape May County, Cumberland County, Gloucester County, Ocean County, or Salem County, a minimum of five new or 15 retained qualifying full-time jobs; or

     (2)   for a qualified facility in counties in the State not listed in paragraph (1) of this subsection, a minimum of ten new or 25 retained qualifying full-time jobs.

     d.    In addition to the amount of credit allowed pursuant to subsection a. of this section, a taxpayer shall be allowed the following tax credits for privilege periods ending in 2020, 2021, and 2022:

     (1)   $1,000 per qualifying full-time job in the privilege period at a qualified facility that is a building vacant for not less than seven years in need of rehabilitation with a minimum of 250,000 square feet;

     (2)   $1,500 per qualifying full-time job in the privilege period at a qualified facility in which the manufacturing of personal protective equipment is part of a research collaboration between the taxpayer and a college or university located within the State; and

     (3)   $1,000 per qualifying full-time job in the privilege period at a qualified facility in which the taxpayer has established an apprenticeship program or pre-apprenticeship program with a technical school or county college located within the State.     

     e.     The total credit allowed to a taxpayer pursuant to this section during the privilege period shall not exceed $500,000.

     f.     Notwithstanding the minimum tax schedule imposed pursuant to subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5), if the amount of the tax credit allowed exceeds the amount of corporation business tax otherwise due pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), the amount of excess shall be treated as a refundable overpayment except that interest shall not be paid pursuant to section 7 of P.L.1992, c.175 (C.54:49-15.1) on the amount of overpayment attributable to this credit amount.  The director shall determine the order of priority of the application of the credit allowed pursuant to this section and any other credits allowed by law.

     g.    The combined value of all tax credits approved by the director pursuant to this section and pursuant to section 2 of P.L.   , c.   (C.    )(pending before the Legislature as this bill) shall not exceed $10,000,000 in any State fiscal year to apply against the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., and the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5).  

     h.    An application for the tax credit shall be submitted to the Division of Taxation in the Department of Treasury in a form and manner prescribed by the director.

     i.     Notwithstanding any provision of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the director is authorized to adopt immediately upon filing with the Office of Administrative Law such rules and regulations shall be effective for a period not to exceed 360 days following the date of filing and may thereafter be amended, adopted, or readopted by the director in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).  The director shall consult with the Commissioner of Health related to any specification requirements for what manufactured products are to qualify as personal protective equipment pursuant to this section.

     j.     As used in this section:

     "Director" means Director of the Division of Taxation in the Department of the Treasury;

     "Personal protective equipment" means coveralls, face shields, gloves, gowns, masks, respirators, and other equipment designed to protect the wearer from the spread of infection or illness.

     "Qualified facility" means a facility that is:

     (1)   located in a redevelopment area or rehabilitation area as defined in section 3 of P.L.1992, c.79 (C.40A:12A-3); 

     (2)   located in a Smart Growth Area as identified by the Office of Planning Advocacy;

     (3)   a facility in which the manufacturing of personal protective equipment is part of a research collaboration between the taxpayer a college or university located within the State;

     (4)   a facility in which the taxpayer has established an apprenticeship program or pre-apprenticeship program with a technical school or community located within the State; or

     (5)   a building vacant for not less than seven years in need of rehabilitation with a minimum of 250,000 square feet. 

     "Qualifying full-time job" means a full-time position in a business in this State which the business has filled with a full-time employee for the manufacturing of personal protective equipment in this State.  The employee shall be employed for at least 35 hours a week and shall be paid employee wages at a rate of not less than $15 per hour, or render any other standard of service generally accepted by custom or practice as full-time employment, whose wages are subject to withholding as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. and is paid employee wages at a rate of not less than $15 per hour.  "Qualifying new hire" shall not include any person who works as an independent contractor or on a consulting basis for the business.  "Qualifying new or retained job" includes only a position for which the taxpayer provides employee health benefits under a group health plan as defined under section 14 of P.L.1997, c.146 (C.17B:27-54), a health benefits plan as defined under section 1 of P.L.1992, c.162 (C.17B:27A-17), or a policy or contract of health insurance covering more than one person issued pursuant to Article 2 of chapter 27 of Title 17B of the New Jersey Statutes.       

 

     2.    a.  For taxable years 2020, 2021, and 2022, a taxpayer, upon approval of an application to the director 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. in the amount of $10,000 for each qualifying new hire involved in the manufacture of personal protective equipment in a qualified facility in which the taxpayer made a capital investment during the taxable year.

     b.    The minimum capital investment in a qualified facility required to be eligible for a credit under this section shall be as follows:

     (1)   for the rehabilitation, improvement, fit-out, or retrofit of an existing premises in Atlantic County, Burlington County, Cape May County, Cumberland County, Gloucester County, Ocean County, or Salem County, a minimum investment of $10 per square foot of gross leasable area;

     (2)   for the rehabilitation, improvement, fit-out, or retrofit of an existing premises in counties in the State not listed in paragraph (1) of this subsection, a minimum investment of $20 per square foot of gross leasable area;

     (3)   for the new construction of a premises in Atlantic County, Burlington County, Cape May County, Cumberland County, Gloucester County, Ocean County, or Salem County, a minimum investment of $100 per square foot of gross leasable area; or

     (4)   for the new construction of a premises in counties in the State not listed in paragraph (3) of this subsection, a minimum investment of $120 per square foot of gross leasable area.                    

     c.     The minimum number of new or retained qualifying full-time jobs required to be eligible for a credit under this section shall be as follows:

     (1)   for a qualified facility in Atlantic County, Burlington County, Cape May County, Cumberland County, Gloucester County, Ocean County, or Salem County, a minimum of five new or 15 retained qualifying full-time jobs; and

     (2)   for a qualified facility in counties in the State not listed in paragraph (1) of this subsection, a minimum of ten new or 25 retained qualifying full-time jobs.      

     d.    In addition to the amount of credit allowed pursuant to subsection a. of this section, a taxpayer shall be allowed the following tax credits for taxable years 2020, 2021, and 2022:

     (1) $1,000 per qualifying full-time job in a taxable year at a qualified facility that is a building vacant for not less than seven years in need of rehabilitation with a minimum of 250,000 square feet;

     (2) $1,500 per qualifying full-time job in a taxable year at a qualified facility in which the manufacturing of personal protective equipment is part of a research collaboration between the taxpayer and a college or university located within the State; and

     (3) $1,000 per qualifying full-time job in a taxable year at a qualified facility in which the taxpayer has established an apprenticeship program or pre-apprenticeship program with a technical school or county college located within the State.    

     e.     The total credit allowed to a taxpayer pursuant to this section during the taxable year shall not exceed $500,000.

     f.     If the amount of the credit exceeds the amount of tax otherwise due, that amount of excess shall be an overpayment for the purposes of N.J.S.54A:9-7; provided however, that subsection (f) of N.J.S.54A:9-7 shall not apply. The director shall determine the order of priority of the application of the credit allowed pursuant to this section and any other credits allowed by law.

     g.    (1)  A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a tax credit pursuant to this section directly, but the amount of tax credit of a taxpayer in respect to distributive share of entity income, shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the entity that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the entity for its taxable year ending within or with the taxpayer's taxable year.

     (2)   A New Jersey S Corporation shall not be allowed a tax credit pursuant to this section directly, but the amount of the tax credit of a taxpayer in respect of a pro rata share of S Corporation income, shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the New Jersey S Corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro rata share of S Corporation income of the New Jersey S Corporation for its privilege period ending within or with the taxpayer's taxable year.

     h.    The combined value of all tax credits approved by the director pursuant to this section and pursuant to section 1 of P.L.   , c.   (C.    )(pending before the Legislature as this bill) shall not exceed $10,000,000 in any State fiscal year to apply against the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., and the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5). 

     i.     An application for the tax credit shall be submitted to the Division of Taxation in the Department of Treasury in a form and manner prescribed by the director.

     j.     Notwithstanding any provision of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the director is authorized to adopt immediately upon filing with the Office of Administrative Law such rules and regulations shall be effective for a period not to exceed 360 days following the date of filing and may thereafter be amended, adopted, or readopted by the director in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).  The director shall consult with the Commissioner of Health related to any specification requirements for what manufactured products are to qualify as personal protective equipment pursuant to this section.

     k.    As used in this section:

     "Director" means Director of the Division of Taxation in the Department of the Treasury;

     "Personal protective equipment" means coveralls, face shields, gloves, gowns, masks, respirators, and other equipment designed to protect the wearer from the spread of infection or illness.

     "Qualified facility" means a facility that is:

     (1)   located in a redevelopment area or rehabilitation area as defined in section 3 of P.L.1992, c.79 (C.40A:12A-3); 

     (2)   located in a Smart Growth Area as identified by the Office of Planning Advocacy;

     (3)   a facility in which the manufacturing of personal protective equipment is part of a research collaboration between the taxpayer a college or university located within the State;

     (4)   a facility in which the taxpayer has established an apprenticeship program or pre-apprenticeship program with a technical school or community located within the State; or

     (5)   a building vacant for not less than seven years in need of rehabilitation with a minimum of 250,000 square feet. 

     "Qualifying full-time job" means a full-time employee hired by the taxpayer during the privilege period for the manufacturing of personal protective equipment in this State.  The person hired shall be employed for at least 35 hours a week and shall be paid employee wages at a rate of not less than $15 per hour, or render any other standard of service generally accepted by custom or practice as full-time employment, whose wages are subject to withholding as provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. and is paid employee wages at a rate of not less than $15 per hour.  "Qualifying new hire" shall not include any person who works as an independent contractor or on a consulting basis for the business.  "Qualifying new or retained job" includes only a position for which the taxpayer provides employee health benefits under a group health plan as defined under section 14 of P.L.1997, c.146 (C.17B:27-54), a health benefits plan as defined under section 1 of P.L.1992, c.162 (C.17B:27A-17), or a policy or contract of health insurance covering more than one person issued pursuant to Article 2 of chapter 27 of Title 17B of the New Jersey Statutes.   

  

     3.    This act shall take effect immediately.

 

 

STATEMENT

 

     This bill provides corporation business tax and gross income tax credits to taxpayers that make investments and create or retain jobs involved in the manufacturing of personal protective equipment in a qualified facility in the State.  Under the bill, personal protective equipment includes coveralls, face shields, gloves, gowns, masks, respirators, and other equipment designed to protect the wearer from the spread of infection or illness. The credits will be allowed for privilege periods ending in 2020, 2021, and 2022 under the corporation business tax and taxable years 2020, 2021, and 2022 under the gross income tax.

     The bill establishes the credit at $10,000 for each full-time employee whose job is related to the manufacturing of personal protective equipment.  Taxpayers are also eligible for additional tax credits $1,000 per qualifying full-time employee per year at a qualified facility that is a building vacant for not less than seven years in need of rehabilitation with a minimum of 250,000 square feet, $1,500 for each qualifying full-time employee through collaboration with a State college or university, and $1,000 per qualifying full-time employee at a qualified facility in which the taxpayer has established an apprenticeship program or pre-apprenticeship program with a technical school or county college located within the State.  The maximum credit for any individual taxpayer is $500,000 and the overall cap on the value of all credits awarded is $10,000,000 for each State fiscal year.  Taxpayers are required to apply for the tax credit in a manner prescribed by the Division of Taxation, and the Director of the Division of Taxation is responsible for determining the order of priority for the application of the credits.  The bill provides that if the amount of the credit exceeds the tax due, the amount in excess is to be treated as an overpayment and be refunded to the taxpayer. 

     To qualify for a tax credits under the bill, a taxpayer must make a minimum investment in a facility that is being rehabilitated for this purpose of $10 per square foot of gross leasable area for a facility in Atlantic County, Burlington County, Cape May County, Cumberland County, Gloucester County, Ocean County, or Salem County; or $20 per square foot of gross leasable area in other counties.  The minimum capital investment for construction of a new facility in Atlantic County, Burlington County, Cape May County, Cumberland County, Gloucester County, Ocean County, or Salem County is $100 per square foot of gross leasable area.  The minimum capital investment for construction of a new facility in any other county is $120 per square foot of gross leasable area.

     The bill also sets requirements on minimum new or retained full-time jobs to be eligible for this program.  Taxpayers in Atlantic County, Burlington County, Cape May County, Cumberland County, Gloucester County, Ocean County, or Salem County must create five new jobs or retain 15 full-time jobs.  Taxpayers in all other counties shall create ten new jobs or retain 25 full-time jobs.

     To qualify under the bill, a job must be a full-time position in this State that requires employment of a person for at least 35 hours a week or other service that can be deemed full-employment, and who is paid at least $15 per hour, and whose wages are subject to withholding per the "New Jersey Gross Income Tax Act."  Additionally, the qualifying new hire only includes positions for which the taxpayer provides the employee with certain minimum health insurance.

     The bill defines a qualified facility to be a facility that satisfies one of the following conditions:

     (1)   located in a redevelopment area or rehabilitation area; 

     (2)   located in a Smart Growth Area as identified by the Office of Planning Advocacy;

     (3)   a facility in which the manufacturing of personal protective equipment is part of a research collaboration between the taxpayer and a college or university located within the State;

     (4)   a facility in which the taxpayer has established an apprenticeship program or pre-apprenticeship program with a technical school or county college located within the State; or

     (5)   a building vacant for not less than seven years in need of rehabilitation with a minimum of 250,000 square feet. 

     The bill authorizes the Director of the Division of Taxation to adopt rules and regulations immediately upon filing with the Office of Administrative Law to administer the bill, and requires the director to consult with the Commissioner of Health related to any specification requirements for what manufactured products are to qualify as personal protective equipment under the bill.

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