Bill Text: NJ A1118 | 2022-2023 | Regular Session | Introduced
Bill Title: Allows tax credits for nonresidential and multifamily building improvement expenses to reduce spread of COVID-19.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2022-01-11 - Introduced, Referred to Assembly Housing Committee [A1118 Detail]
Download: New_Jersey-2022-A1118-Introduced.html
STATE OF NEW JERSEY
220th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2022 SESSION
Sponsored by:
Assemblywoman ANNETTE CHAPARRO
District 33 (Hudson)
Assemblyman JOE DANIELSEN
District 17 (Middlesex and Somerset)
Assemblyman RONALD S. DANCER
District 12 (Burlington, Middlesex, Monmouth and Ocean)
Co-Sponsored by:
Assemblymen Space, Wirths, Thomson and Assemblywoman Reynolds-Jackson
SYNOPSIS
Allows tax credits for nonresidential and multifamily building improvement expenses to reduce spread of COVID-19.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act allowing tax credits for building improvement expenses to reduce the spread of COVID-19, supplementing Title 54A of the New Jersey Statutes and P.L.1945, c.162 (C.54:10A-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. For taxable years 2020, 2021, and 2022, a taxpayer shall be allowed a credit against the tax otherwise due under the New Jersey Gross Income Tax Act in an amount determined pursuant to subsection b. of this section, for the taxpayer's expenditures during the taxable year for improvements to nonresidential and multifamily buildings made to reduce the spread of COVID-19. Taxpayer expenditures includable in the calculation of the credit are expenditures for:
(1) bi-polar ionization and ultraviolet lighting to disinfect indoor air and surfaces, including in elevators and work areas;
(2) infrared thermometers for screening visitors in common areas;
(3) transparent sneeze guards or shields;
(4) touchless entryway and security to reduce the spread of COVID-19;
(5) ventilation improvements to reduce the spread of COVID-19; and
(6) other materials, supplies, and equipment to reduce the spread of COVID-19 and necessary to create a safe environment for occupants of the building.
b. The amount of credit allowed pursuant to subsection a. of this section shall be equal to:
75 percent of the taxpayer's expenditures for a location of less than 30,000 square feet, but the credit for such expenditures shall not exceed $100,000 per location; and
50 percent of the taxpayer's expenditures for a location of 30,000 square feet or more, but the credit for such expenditures shall not exceed $250,000 per location.
c. A taxpayer that claims a credit pursuant to this section shall add back to gross income the amount of any deducted expenditures includable in the calculation of the credit.
d. The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed pursuant to the New Jersey Gross Income Tax Act for a taxable year shall be as prescribed by the director. The amount of the credit applied under this section against the tax imposed for a taxable year, together with any other credits allowed by law, shall not reduce the tax liability to an amount less than zero. The amount of the tax credit otherwise allowed under this section that cannot be applied for the taxable year may be carried forward, if necessary, to the seven taxable years following the taxable year for which the tax credit was first allowed.
e. A business entity that is classified as a partnership for federal income tax purposes shall not be allowed the credit directly, but the amount of credit of a taxpayer in respect of a distributive share of partnership income 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.
A taxpayer that is a New Jersey S corporation shall not be allowed the credit directly, but the amount of 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 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.
f. 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 as are necessary to effectuate the provisions of this section, which shall be effective for a period not to exceed 18 months 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.).
2. a. For privilege periods ending in calendar year 2020, 2021, and 2022, 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 determined pursuant to subsection b. of this section, for the taxpayer's expenditures during the privilege period for improvements to nonresidential and multifamily buildings made to reduce the spread of COVID-19. Taxpayer expenditures includable in the calculation of the credit are expenditures for:
(1) bi-polar ionization and ultraviolet lighting to disinfect indoor air and surfaces, including in elevators and work areas;
(2) infrared thermometers for screening visitors in common areas;
(3) transparent sneeze guards or shields;
(4) touchless entryway and security to reduce the spread of COVID-19;
(5) ventilation improvements to reduce the spread of COVID-19; and
(6) other materials, supplies, and equipment to reduce the spread of COVID-19 and necessary to create a safe environment for occupants of the building.
b. The amount of credit allowed pursuant to subsection a. of this section shall be equal to:
75 percent of the taxpayer's expenditures for a location of less than 30,000 square feet, but the credit for such expenditures shall not exceed $100,000 per location; and
50 percent of the taxpayer's expenditures for a location of 30,000 square feet or more, but the credit for such expenditures shall not exceed $250,000 per location.
c. A taxpayer that claims a credit pursuant to this section shall add back to entire net income the amount of any deducted expenditure includable in the calculation of the credit.
d. The director shall prescribe the order of priority of the application of the credit allowed under this section and any other credits allowed by law against the tax imposed under section 5 of P.L.1945, c.162 (C.54:10A-5). 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, together with any other credits allowed by law, 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 (C.54:10A-5). The amount of the tax credit otherwise allowed under this section that cannot be applied for the privilege period may be carried forward, if necessary, to the seven privilege periods following the privilege period for which the tax credit was first allowed.
e. 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 as are necessary to effectuate the provisions of this section, which shall be effective for a period not to exceed 18 months 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.).
3. This act shall take effect immediately and apply to expenditures made after March 9, 2020 and before January 1, 2023.
STATEMENT
This bill, allows corporation business tax and gross income tax credits for nonresidential and multifamily building improvement expenses to reduce the spread of COVID-19. The credit will be allowed for expenditures made during calendar years 2020, 2021, and 2022.
The following expenditures will be includable in calculation of the credit: expenditures for (1) bi-polar ionization and ultraviolet lighting to disinfect indoor air and surfaces, including in elevators and work areas; (2) infrared thermometers for screening visitors in common areas; (3) transparent sneeze guards or shields; (4) touchless entryway and security; (5) ventilation; and (6) other materials, supplies, and equipment to reduce the spread of COVID-19 and necessary to create a safe environment for building occupants.
The amount of credit allowed will be equal to: 75 percent of the taxpayer's expenditures for a location of less than 30,000 square feet, but the credit for such expenditures cannot exceed $100,000; and 50 percent of the taxpayer's expenditures for a location of 30,000 square feet or more, but the credit for such expenditures cannot exceed $250,000. A taxpayer that claims a credit pursuant to this bill will be required to add back into their calculation of income the amount of any expenditures that the taxpayer deducted. This requirement ensures that the taxpayer does not get the double benefit of being allowed to deduct expenses from income and get a credit against their tax liability to cover the cost of those expenses.
