Bill Text: NJ A4009 | 2024-2025 | Regular Session | Introduced
Bill Title: Imposes CBT surtax at rate of 2.5 percent until December 31, 2025 and requires amount collected from surtax be dedicated to specific purposes.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-03-07 - Introduced, Referred to Assembly Commerce, Economic Development and Agriculture Committee [A4009 Detail]
Download: New_Jersey-2024-A4009-Introduced.html
Sponsored by:
Assemblywoman SHAVONDA E. SUMTER
District 35 (Bergen and Passaic)
SYNOPSIS
Imposes CBT surtax at rate of 2.5 percent until December 31, 2025 and requires amount collected from surtax be dedicated to specific purposes.
CURRENT VERSION OF TEXT
As introduced.
An Act imposing the corporation business tax surtax at a rate of 2.5 percent through December 31, 2025, requiring amount collected from the surtax be dedicated to specific purposes, and amending P.L.2018, c.48.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 1. of P.L.2018, c.48 (C.54:10A-5.41) is amended to read as follows:
1. a. In addition to the tax paid by each taxpayer determined pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), each taxpayer, except for a public utility, shall be assessed and shall pay a surtax as follows:
(1) For a taxpayer, except a public utility, that has allocated taxable net income in excess of $1 million for the privilege periods, beginning on or after January 1, 2018 through December 31, [2023] 2025, the surtax imposed shall be 2.5%; provided, however, that if the federal corporate income tax rate imposed pursuant to section 11 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.11) is increased to a rate of at least 35% of taxable income, the imposition of the surtax imposed pursuant to this section shall be suspended following the conclusion of a taxpayer's privilege period corresponding with the increase to the federal corporate income tax rate.
(2) (Deleted by amendment, P.L.2020, c.95)
b. For purposes of this section,
(1) "taxpayer" shall mean any business entity that is subject to tax as provided in the Corporation Business Tax (1945), P.L.1945, c.162 (C.54:10A-1 et seq.).
(2) "allocated taxable net income" shall mean allocated entire net income for privilege periods ending before July 31, 2019, or taxable net income as defined in subsection (w) of section 4 of P.L.1945, c.162 (C.54:10A-4) for privilege periods ending on and after July 31, 2019.
(3) "public transportation project" shall mean the same as the term is defined in section 3 of P.L.1984, c.73 (C.27:1B-3).
(4) "public transportation service" shall mean the same as the term is defined in section 3 of P.L.1979, c.150 (C.27:25-3).
The surtax imposed under this section shall be imposed on allocated taxable net income, and shall be due and payable in accordance with section 15 of P.L.1945, c.162 (C.54:10A-15), and the surtax shall be administered pursuant to the provisions of P.L.1945, c.162 (C.54:10A-1 et seq.). Notwithstanding the provisions of any other law to the contrary, no credits shall be allowed against the surtax liability computed under this section except for credits for installment payments, estimated payments made with a request for an extension of time for filing a return, or overpayments from prior privilege periods.
There shall be credited to a special account in the General Fund, which account shall be designated as the Statewide Public Transportation, Public Education, and Public Employee Health Benefits Improvement Account, an amount equivalent to the amount of revenue annually derived from the surtax imposed under this section. The amount annually credited pursuant to this section shall be dedicated, and shall be appropriated annually, only for supporting the costs related to the following purposes: the provision of public transportation services, the completion of public transportation projects, the State's public school system, and reimbursements to State employees for all or part of their contributions made toward the cost of health care benefits provided by the employer.
(cf: P.L.2020, c.95, s.1)
2. This act shall take effect immediately and shall apply to privilege periods beginning on or after January 1, 2024.
STATEMENT
This bill would extend the existing 2.5 percent corporation business tax (CBT) surtax until December 31, 2025 and requires that the amount collected from the surtax be dedicated to specific purposes.
The CBT surtax is currently imposed on taxpayers that are not public utilities and have allocated taxable net income in excess of $1 million. Taxpayers are not allowed to apply tax credits against surtax liability, except those credits from installment payments, estimated payments with a request for an extension of time for filing a return, or overpayments from prior privilege periods. In the event that the federal corporate income tax rate is increased to its pre-Tax Cut and Jobs Act level (35% of taxable income), the surtax will be suspended at the end of a taxpayer's current privilege period. Under current law, the surtax is set to expire on December 31, 2023.
The bill would allow the surtax to remain in effect beyond December 31, 2023 by extending its duration an additional two years. Pursuant to the provisions of this bill, the surtax would instead expire on December 31, 2025. The bill would also require that the revenue annually derived from imposition of the surtax be credited to a newly created special account in the General Fund that will be dedicated to supporting the provision of public transportation services, the completion of public transportation projects, the State's public school system, and reimbursements to State employees for all or part of their contributions made toward the cost of health care benefits provided by the employer. The name of this special account would be the "Statewide Public Transportation, Public Education, and Public Employee Health Benefits Improvement Account."
