New Jersey-2024-A3532-Introduced

An Act providing a New Jersey gross income tax credit to active members of volunteer emergency service organizations for the use of a personal vehicle in the performance of active duty, supplementing 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. a. As used in this section:

"Active duty" by an active member of a volunteer emergency services organization means direct participation in the organization's response to emergency calls or alarms, extinguishing of fires, or other provision of emergency services for the protection of life and property from harm.

"Active member" means a member of a volunteer emergency services organization, who, during the entire taxable year with respect to which a credit claimed under subsection b. of this section, was a member in good standing with active member status of the organization and received no remuneration, other than a clothing allowance or other monetary reimbursement for clothing for its upkeep, or both, for serving with the organization. Benefits accrued or received under the "Emergency Services Volunteer Length of Service Award Program Act," P.L.1997, c.388 (C.40A:14-183 et seq.), shall not be deemed to be remuneration for the purposes of this section.

"Ancillary duty" by an active member of a volunteer emergency services organization means performance of any duty, other than active duty, attendance at official meetings of the organization, or participation in authorized drills, training classes or exercises conducted by the organization, that may be required to maintained membership in good standing in the organization, but shall not include fund-raising or social activity.

"Qualifying service" during a taxable year by an active member of a volunteer emergency services organization means:

(1) for a volunteer who is not responsible for duty hours, (a) recorded attendance and performance of active duty at not less than 60 percent of the regular service alarms or other calls to active duty to which the organization responds during the taxable year, (b) recorded attendance at not less than 60 percent of the official meetings of the organization, (c) attendance at and participation in 100 percent of all authorized drills or other training classes or exercises, conducted or sponsored by the organization during the taxable year, in which the organization requires the active member to participate as a condition of the member's performance of active duty with the organization, and (d) performance during the taxable year of not less than 60 percent of ancillary duty to or with the organization; or

(2) for a volunteer who is responsible for duty hours, performance of at least 400 duty hours during the taxable year, of which not more than 50 percent shall be for drills and other training classes or exercises.

"Volunteer emergency services organization" means:

(1) a fire company, part-paid fire department, volunteer fire department, or fire district designated or incorporated under the laws of this State for the purpose of protecting life and property from fire, serving one or more counties or municipalities within this State; and

(2) an emergency first aid, ambulance, or rescue squad or association, composed of volunteers and incorporated or associated as a nonprofit corporation or association under the laws of this State, which provides emergency first aid, ambulance, or rescue services to one or more counties or municipalities within this State.

b. A taxpayer who, during the taxable year, is at all times an active member of a volunteer emergency services organization and completes qualifying service with the organization shall be allowed a credit, against the tax otherwise due pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. for each mile actually and necessarily traveled by a taxpayer who utilizes their personal vehicle in the performance of active duty.

c. The credit shall be in an amount determined by multiplying the standard mileage rate set by the federal Internal Revenue Service, or its successor, to calculate deductible costs of operating an automobile for business purposes for the taxable year in which the credit is claimed by the number of miles actually and necessarily traveled by the taxpayer in the performance of active duty in the taxable year for which the credit is claimed. The amount of the credit shall not exceed $500 for a single taxpayer. If married individuals filing a joint return under this act shall each meet the requirements to claim the credit, they shall be allowed a total credit against the tax in the amount of $1,000.

d. A taxpayer who is not subject to tax in accordance with N.J.S.54A:2-4 for a taxable year may apply for a credit using an application to be made available by the director. The due date for a tax credit application submitted pursuant to this subsection shall coincide with the due date for annual gross income tax returns.

e. In the case of married individuals filing jointly, each individual shall be permitted to claim the credit pursuant to this section in the taxable year if that individual is eligible for the credit.

f. If the credit allowed pursuant to this section, together with any other payments, credits, deductions and adjustments allowed by law, reduced a qualified taxpayer's tax liability otherwise due under N.J.S.54A:1-1 et seq. to zero, the amount of the credit remaining shall be paid to the taxpayer as a refund of an overpayment in accordance with N.J.S.54A:9-7; provided, however, that subsection (f) of that section, concerning the allowance of interest, shall not apply.

g. On or before January 15 of each year, each volunteer emergency services organization shall certify to the Director of the Division of Taxation a list of the active members of the organization during the taxable year ending on the preceding December 31, together with any documentation of that service as the director may require.

h. The Director of the Division of Taxation shall adopt, in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), such rules and regulations concerning the certification by any volunteer emergency services organization of the performance, by an active member of the organization, of active duty and ancillary duty to or on behalf of the organization, attendance at official meetings of the organization, and participation in authorized drills, training classes and exercises of the organization, together with any other appropriate rules and regulations, as may be necessary to effectuate the purposes of this section.

2. This act shall take effect immediately and shall apply to taxable years beginning on or after January 1 next following the date of enactment.

STATEMENT

This bill establishes a refundable gross income tax credit to provide reimbursement to active members of volunteer fire departments and first aid squads for the use of their personal vehicle in the performance of active duty.

The amount of the credit is determined by multiplying the business standard mileage rate set by the Internal Revenue Service for transportation or travel expenses by the number of miles the taxpayer actually and necessarily traveled by the taxpayer in the tax year using their personal vehicle in the performance of active duty. The maximum amount of the credit would be $500. If married individuals filing a joint return both qualify, they would be allowed a joint credit of up to $1,000.

To be eligible for the credit, a taxpayer would, in the taxable year for which the credit was claimed, have to: (1) have been an unpaid member in good standing of the organization; and (2) have completed "qualifying service" with the organization.

The bill defines "qualifying service" as:

(a) for a volunteer who does not have duty hours, (i) active participation in at least 60 percent of the regular alarms or other calls to active duty to which the organization responds during the taxable year, (ii) recorded attendance at not less than 60 percent of the organization's mandatory meetings during the year, (iii) participation in all of the organization's mandatory meetings during the year, and (iv) performance during the year of not less than 60 percent of any other miscellaneous duty required by the organization; or

(b) for a volunteer who does have duty hours, performance of at least 400 duty hours during the year, of which no more than 50 percent could be for drills or other training classes or exercises.

The bill requires each volunteer emergency services organization to certify to the Director of the Division of Taxation in the Department of the Treasury, on or before January 15 of each year, a list of the active members of the organization during the prior tax year. The certification will assist the Division of Taxation in verifying a taxpayer's eligibility for a gross income tax credit under the bill.