Bill Text: NJ S3178 | 2010-2011 | Regular Session | Introduced
Bill Title: Concerns determination of allocated net operating losses for corporation business tax benefit certificate transfer program.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-01-05 - Introduced in the Senate, Referred to Senate Budget and Appropriations Committee [S3178 Detail]
Download: New_Jersey-2010-S3178-Introduced.html
Sponsored by:
Senator RAYMOND J. LESNIAK
District 20 (Union)
SYNOPSIS
Concerns determination of allocated net operating losses for corporation business tax benefit certificate transfer program.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the determination of allocated net operating losses for purposes of the corporation business tax benefit certificate transfer program, supplementing P.L.1997, c.334 (C.34:1B-7.42a et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Notwithstanding the provisions of section 6 of P.L.1945, c162 (C.54:10A-6) to the contrary, for the purposes of determining an eligible applicant's unused but otherwise allowable carryover of net operating losses multiplied by the applicant's anticipated allocation factor as determined pursuant to section 6 of P.L.1945, c.162 (C.54:10A-6) for the tax year in which the benefit is transferred pursuant to section 1 of P.L.1997, c.334 (C.34:1B-7.42a), the allocation factor shall be determined pursuant to the laws of allocation which would have applied for a privilege period beginning on January 1, 2002.
2. This act shall take effect immediately and shall apply to benefits transferred on and after January 1, 2012.
STATEMENT
This bill restores the apportionment rules in place for corporation business tax privilege period (tax year) 2002 for taxpayers who participate in the corporation business tax benefit certificate transfer program.
The corporation business tax benefit certificate transfer program enables approved technology and biotechnology businesses with net operating losses to sell their unused net operating loss carryover (NOL) and unused research expense and research payment tax credits (R&D tax credits) for at least 80% of the value of the tax benefits to a profitable corporate taxpayer in the State of New Jersey that is not an affiliated business. This allows technology and biotechnology businesses with net operating losses to turn their tax losses and credits into cash to buy equipment or facilities, or for other allowable expenditures. The New Jersey Economic Development Authority determines eligibility, and the Division of Taxation in the Department of the Treasury determines the value of the tax benefits (NOLs and R&D tax credits).
This bill protects taxpayers from the unintended consequences of the conversion to a single sales fraction calculation (P.L.2011, c.59) and the elimination of the "throwout" rule and the "regular place of business" requirement (P.L.2008, c.120), which would diminish the apportioned net operating losses of these taxpayers.
