Bill Text: NJ A3201 | 2012-2013 | Regular Session | Introduced
Bill Title: Increases the gross income tax rate on taxable income exceeding $1 million contingent on enactment of certain homestead benefit enhancement legislation.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Enrolled - Dead) 2012-10-11 - 2nd Reading in the Assembly on Concur. w/Gov.'s Recommend. [A3201 Detail]
Download: New_Jersey-2012-A3201-Introduced.html
Sponsored by:
Assemblyman LOUIS D. GREENWALD
District 6 (Burlington and Camden)
SYNOPSIS
Increases the gross income tax rate on taxable income exceeding $1 million contingent on enactment of certain homestead benefit enhancement legislation.
CURRENT VERSION OF TEXT
As introduced.
An Act increasing the gross income tax rate on taxable income exceeding $1,000,000, amending N.J.S.54A:2-1 and supplementing Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. N.J.S.54A:2-1 is amended to read as follows:
54A:2-1. Imposition of tax. There is hereby imposed a tax for each taxable year (which shall be the same as the taxable year for federal income tax purposes) on the New Jersey gross income as herein defined of every individual, estate or trust (other than a charitable trust or a trust forming part of a pension or profit-sharing plan), subject to the deductions, limitations and modifications hereinafter provided, determined in accordance with the following tables with respect to taxpayers' taxable income:
a. For married individuals filing a joint return and individuals filing as head of household or as surviving spouse for federal income tax purposes:
(1) for taxable years beginning on or after January 1, 1991 but before January 1, 1994:
If the taxable income is: The tax is:
Not over $20,000.00.......... 2% of taxable income
Over $20,000.00 but not
over $50,000.00............. $400.00 plus 2.5% of the
excess over $20,000.00
Over $50,000.00 but not
over $70,000.00.............. $1,150.00 plus 3.5% of the
excess over $50,000.00
Over $70,000.00 but not
over $80,000.00.............. $1,850.00 plus 5.0% of the
excess over $70,000.00
Over $80,000.00 but not
over $150,000.00............. $2,350.00 plus 6.5% of the
excess over $80,000.00
Over $150,000.00............... $6,900.00 plus 7.0% of the
excess over $150,000.00
(2) for taxable years beginning on or after January 1, 1994 but before January 1, 1995:
If the taxable income is: The tax is:
Not over $20,000.00.............. 1.900% of taxable income
Over $20,000.00 but not
over $50,000.00................ $380.00 plus 2.375% of the
excess over $20,000.00
Over $50,000.00 but not
over $70,000.00.............. $1,092.50 plus 3.325% of the
excess over $50,000.00
Over $70,000.00 but not
over $80,000.00.............. $1,757.50 plus 4.750% of the
excess over $70,000.00
Over $80,000.00 but not
over $150,000.00............. $2,232.50 plus 6.175% of the
excess over $80,000.00
Over $150,000.00 ............. $6,555.00 plus 6.650% of the
excess over $150,000.00
(3) for taxable years beginning on or after January 1, 1995 but before January 1, 1996:
If the taxable income is: The tax is:
Not over $20,000.00............. 1.700% of taxable income
Over $20,000.00 but not
over $50,000.00................ $340.00 plus 2.125% of the
excess over $20,000.00
Over $50,000.00 but not
over $70,000.00.............. $977.50 plus 2.975% of the
excess over $50,000.00
Over $70,000.00 but not
over $80,000.00.............. $1,572.50 plus 4.250% of the
excess over $70,000.00
Over $80,000.00 but not
over $150,000.00............. $1,997.50 plus 6.013% of the
excess over $80,000.00
Over $150,000.00 ............. $6,206.60 plus 6.580% of the
excess over $150,000.00
(4) for taxable years beginning on or after January 1, 1996 but before January 1, 2004:
If the taxable income is: The tax is:
Not over $20,000.00............ 1.400% of taxable income
Over $20,000.00 but not
over $50,000.00................ $280.00 plus 1.750% of the
excess over $20,000.00
Over $50,000.00 but not
over $70,000.00.............. $805.00 plus 2.450% of the
excess over $50,000.00
Over $70,000.00 but not
over $80,000.00.............. $1,295.50 plus 3.500% of the
excess over $70,000.00
Over $80,000.00 but not
over $150,000.00............. $1,645.00 plus 5.525% of the
excess over $80,000.00
Over $150,000.00 ............. $5,512.50 plus 6.370% of the
excess over $150,000.00
(5) for taxable years beginning on or after January 1, 2004 but before January 1, 2012 (except as provided in section 1 of P.L.2009, c.69 (C.54A:2-1a) for taxable years beginning on or after January 1, 2009 but before January 1, 2010):
If the taxable income is: The tax is:
Not over $20,000.00 ........... 1.400% of taxable income
Over $20,000.00 but not
over $50,000.00 ................ $280.00 plus 1.750% of the
excess over $20,000.00
Over $50,000.00 but not
over $70,000.00 ............. $805.00 plus 2.450% of the
excess over $50,000.00
Over $70,000.00 but not
over $80,000.00 ............. $1,295.50 plus 3.500% of the
excess over $70,000.00
Over $80,000.00 but not
over $150,000.00 ............ $1,645.00 plus 5.525% of the
excess over $80,000.00
Over $150,000.00 but not
over $500,000.00 ............ $5,512.50 plus 6.370% of the
excess over $150,000.00
Over $500,000.00 ............ $27,807.50 plus 8.970% of the
excess over $500,000.00
(6) for taxable years beginning on or after January 1, 2012:
If the taxable income is: The tax is:
Not over $20,000.00 ........... 1.400% of taxable income
Over $20,000.00 but not
over $50,000.00 ................ $280.00 plus 1.750% of the
excess over $20,000.00
Over $50,000.00 but not
over $70,000.00 ............. $805.00 plus 2.450% of the
excess over $50,000.00
Over $70,000.00 but not
over $80,000.00 ............. $1,295.50 plus 3.500% of the
excess over $70,000.00
Over $80,000.00 but not
over $150,000.00 ............ $1,645.00 plus 5.525% of the
excess over $80,000.00
Over $150,000.00 but not
over $500,000.00 ............ $5,512.50 plus 6.370% of the
excess over $150,000.00
Over $500,000.00 but not
over $1,000,000.00 .......... $27,807.50 plus 8.970% of the
excess over $500,000.00
Over $1,000,000.00 ......... $72,657.50 plus 10.75% of the
excess over $1,000,000.00
b. For married individuals filing separately, unmarried individuals other than individuals filing as head of household or as a surviving spouse for federal income tax purposes, and estates and trusts:
(1) for taxable years beginning on or after January 1, 1991 but before January 1, 1994:
If the taxable income is: The tax is:
Not over $20,000.00............ 2% of taxable income
Over $20,000.00 but not
over $35,000.00................ $400.00 plus 2.5% of the
excess over $20,000.00
Over $35,000.00 but not
over $40,000.00................ $775.00 plus 5.0% of the
excess over $35,000.00
Over $40,000.00 but not
over $75,000.00.............. $1,025.00 plus 6.5% of the
excess over $40,000.00
Over $75,000.00................ $3,300.00 plus 7.0% of the
excess over $75,000.00
(2) for taxable years beginning on or after January 1, 1994 but before January 1, 1995:
If the taxable income is: The tax is:
Not over $20,000.00...... 1.900% of taxable income
Over $20,000.00 but not
over $35,000.00......... $380.00 plus 2.375% of the
excess over $20,000.00
Over $35,000.00 but not
over $40,000.00................ $736.25 plus 4.750% of the
excess over $35,000.00
Over $40,000.00 but not
over $75,000.00.............. $973.75 plus 6.175% of the
excess over $40,000.00
Over $75,000.00............... $3,135.00 plus 6.650% of the
excess over $75,000.00
(3) for taxable years beginning on or after January 1, 1995 but before January 1, 1996:
If the taxable income is: The tax is:
Not over $20,000.00......... 1.700% of taxable income
Over $20,000.00 but not
over $35,000.00................ $340.00 plus 2.125% of the
excess over $20,000.00
Over $35,000.00 but not
over $40,000.00................ $658.75 plus 4.250% of the
excess over $35,000.00
Over $40,000.00 but not
over $75,000.00.............. $871.25 plus 6.013% of the
excess over $40,000.00
Over $75,000.00............... $2,975.80 plus 6.580% of the
excess over $75,000.00
(4) for taxable years beginning on or after January 1, 1996 but before January 1, 2004:
If the taxable income is: The tax is:
Not over $20,000.00............ 1.400% of taxable income
Over $20,000.00 but not
over $35,000.00................ $280.00 plus 1.750% of the
excess over $20,000.00
Over $35,000.00 but not
over $40,000.00................ $542.50 plus 3.500% of the
excess over $35,000.00
Over $40,000.00 but not
over $75,000.00.............. $717.50 plus 5.525% of the
excess over $40,000.00
Over $75,000.00............... $2,651.25 plus 6.370% of the
excess over $75,000.00
(5) for taxable years beginning on or after January 1, 2004 but before January 1, 2012 (except as provided in section 1 of P.L.2009, c.69 (C.54A:2-1a) for taxable years beginning on or after January 1, 2009 but before January 1, 2010):
If the taxable income is: The tax is:
Not over $20,000.00 ............ 1.400% of taxable income
Over $20,000.00 but not
over $35,000.00 ............... $280.00 plus 1.750% of the
excess over $20,000.00
Over $35,000.00 but not
over $40,000.00 ............... $542.50 plus 3.500% of the
excess over $35,000.00
Over $40,000.00 but not
over $75,000.00 ............. $717.50 plus 5.525% of the
excess over $40,000.00
Over $75,000.00 but not
over $500,000.00 ............. $2,651.25 plus 6.370% of the
excess over $75,000.00
Over $500,000.00 ............... $29,723.75 plus 8.970% of the
excess over $500,000.00
(6) for taxable years beginning on or after January 1, 2012:
If the taxable income is: The tax is:
Not over $20,000.00 ............ 1.400% of taxable income
Over $20,000.00 but not
over $35,000.00 ............... $280.00 plus 1.750% of the
excess over $20,000.00
Over $35,000.00 but not
over $40,000.00 ............... $542.50 plus 3.500% of the
excess over $35,000.00
Over $40,000.00 but not
over $75,000.00 ............. $717.50 plus 5.525% of the
excess over $40,000.00
Over $75,000.00 but not
over $500,000.00 ............. $2,651.25 plus 6.370% of the
excess over $75,000.00
Over $500,000.00 but not
over $1,000,000.00 ............. $29,723.75 plus 8.970% of the
excess over $500,000.00
Over $1,000,000.00 ......... $74,573.75 plus 10.75% of the
excess over $1,000,000.00
c. For the purposes of this section, an individual who would be eligible to file as a head of household for federal income tax purposes but for the fact that such taxpayer is a nonresident alien, shall determine tax pursuant to subsection a. of this section.
(cf: P.L.2004, c.40, s.17)
2. (New section) a. Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the Director of the Division of Taxation may adopt, immediately upon filing with the Office of Administrative Law, such regulations as the director deems necessary to implement the amendments to N.J.S.54A:2-1 made by section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) as to taxable years beginning in 2012, which regulations shall be effective for a period not to exceed 180 days from the date of the filing. The regulations may thereafter be amended, adopted, or readopted by the director as the director deems necessary in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).
b. (1) For purposes of the amendments to N.J.S.54A:2-1 made by section 1 of P.L. , c. (pending before the Legislature as this bill), this subsection shall apply for taxable years beginning in 2012.
(2) No additions to tax or penalty shall be imposed upon a taxpayer pursuant to N.J.S.54A:9-6 for insufficient payment of increased estimated tax on taxable income received before October 1, 2012 for which the increased estimated tax due is attributable to the rate imposed on taxable income over $1,000,000 by the amendments to N.J.S.54A:2-1 made by section 1 of P.L. , c. (pending before the Legislature as this bill).
(3) No interest, penalties, or other costs shall be imposed upon an employer maintaining an office or transacting business within this State and making payment of any salaries, wages and remuneration subject to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., or making payment of any remuneration for employment subject to contribution under the New Jersey "unemployment compensation law," pursuant to R.S.43:21-1 et seq., for insufficient withholding of salaries, wages, and other remuneration paid before October 1, 2012 that is attributable to an increase in the amount of tax due pursuant to the rate imposed on taxable income over $1,000,000 by the amendments to N.J.S.54A:2-1 made by section 1 of P.L. , c. (pending before the Legislature as this bill).
3. This act shall take effect immediately, but shall remain inoperative until the enactment of P.L. , c. (C. ) (pending before the Legislature as Assembly Bill No. 3202 of 2012 or Senate Bill No. 2096 of 2012).
STATEMENT
This bill increases the gross income tax rate on annual taxable income exceeding $1 million beginning with taxable year 2012, but only if legislation is enacted enhancing the homestead benefit.
The bill raises the marginal gross income tax rate on annual taxable income exceeding $1 million from 8.97% to 10.75%. This means that the bill raises the rate of taxation by 1.78% for each dollar reported above $1 million.
However, the bill's enactment is contingent upon the passage of legislation enhancing the homestead benefit, which has been introduced as Assembly Bill No. 3202 of 2012 or Senate Bill No. 2096 of 2012.
The purpose of the bill is to provide a source of funding for enhancing the homestead benefit. In so doing the bill will support efforts to temper the regressivity of the property tax system for the bulk of New Jersey's property taxpayers, while minimizing the impact of requisite revenue raising to less than two cents of every post-deduction dollar reported over $1 million in New Jersey's highest tax bracket.
