Bill Text: NJ A4172 | 2010-2011 | Regular Session | Amended
Bill Title: Provides credits against corporation business and gross income taxes to small and medium-sized businesses for certain export and export promotion activity; designated as the Export Promotion Tax Credit Act.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2011-12-08 - Reported out of Asm. Comm. with Amendments, and Referred to Assembly Appropriations Committee [A4172 Detail]
Download: New_Jersey-2010-A4172-Amended.html
Sponsored by:
Assemblyman RUBEN J. RAMOS, JR.
District 33 (Hudson)
Assemblyman JASON O'DONNELL
District 31 (Hudson)
SYNOPSIS
Provides credits against corporation business and gross income taxes to small and medium-sized businesses for certain export and export promotion activity; designated as the Export Promotion Tax Credit Act.
CURRENT VERSION OF TEXT
As reported by the Assembly Commerce and Economic Development Committee on December 8, 2011, with amendments.
An Act providing a corporation business tax credit and a gross income tax credit to encourage exporting by certain businesses and designated as the Export Promotion Tax Credit Act, and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and 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. (1) A small or medium-sized business taxpayer that had no qualified export receipts for the three privilege periods ending with the privilege period in which P.L. , c. (C. ) (pending before the Legislature as this bill) takes effect shall be allowed, for the six privilege periods beginning after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), as follows:
(a) For the first, second, and third of those privilege periods, the amount of the annual tax credit shall equal 10 percent of the gross amount of the taxpayer's qualified export receipts for the privilege period, provided that the credit shall not exceed, for the first privilege period 100 percent, for the second privilege period 66 2/3 percent, and for the third privilege period 33 1/3 percent, of the amount of the taxpayer's qualified export promotion expenses for the respective periods; and
(b) For the fourth, fifth, and sixth of those privilege periods, the amount of the annual tax credit shall equal 10 percent of the amount of the excess of the taxpayer's qualified export promotion expenses for the privilege period over the base amount of those expenses.
(2) A small or medium-sized business taxpayer that had qualified export receipts for any of the three privilege periods ending with the privilege period in which P.L. , c. (C. ) (pending before the Legislature as this bill) takes effect shall be allowed, for the three privilege periods beginning after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), a credit against the tax imposed by section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to 10 percent of the excess of the taxpayer's qualified export promotion expenses for the privilege periods over the base amount of those expenses.
b. 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. The amount of the credit
applied under this section against the tax imposed pursuant to section 5 of P.L.1945,
c.162 1(C.54:10A-5)1 for a privilege
period, together with any other
credits allowed against the tax imposed pursuant to section 5 of P.L.1945,
c.162 1(C.54:10A-5)1, shall not exceed
50 percent of the tax liability otherwise due and 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 1(C.54:10A-5(e))1.
c. The amount of any credit otherwise allowable under this section that cannot be applied for the privilege period against the tax liability otherwise due for that privilege period may be carried over, if necessary, to the five privilege periods following the privilege period for which the credit was allowed.
d. As used in this section:
"Base amount" for a privilege period for which a taxpayer claims a credit means the average of the taxpayer's adjusted annual amount of qualified export promotion expenses for the three privilege periods immediately preceding that privilege period, provided that the base amount shall not be less than 50 percent of the qualified export promotion expenses for the period for which the taxpayer claims the credit. The annual amount of qualified export promotion expenses for a privilege period used to calculate a base amount shall be adjusted by multiplying the amount of expenses for that period by the fraction, expressed as a decimal, of the implicit price deflator for gross private domestic fixed investment, as determined by the Bureau of Economic Analysis of the United States Department of Commerce, for the privilege period for which a credit is allowable divided by that average price deflator for the prior privilege period.
"Qualified export promotion expenses" means amounts paid (1) to participate in a foreign trade mission or to attend a foreign trade or catalog show, which mission or show is sponsored by the United States Department of Commerce, the United States Foreign and Commercial Service, the United States Department of Education, or any other agency or instrumentality of the United States, or by the New Jersey Economic Development Authority or any other agency or instrumentality of the State, and (2) to compensate an individual or firm for services rendered and expenses incurred for the purpose of promoting the taxpayer's business with foreign buyers by any means, including but not limited to the identification of foreign export markets for the goods or services that the taxpayer offers to sell or render in the regular course of business, the identification of goods or services that the taxpayer does or could offer for sale in foreign markets, the development of foreign sources of financing for the production in this State of goods for foreign export or the recruitment of foreign agents through whom or through which such goods or services might be marketed.
"Qualified export receipts" means "qualified export receipts" as defined by subsection (a) of section 993 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.993).
"Small or medium-sized business taxpayer" means a taxpayer that has its principal place of business in this State and has no more than 250 full-time employees.
2. a. (1) A small or medium-sized business taxpayer that had no qualified export receipts for the three taxable years ending with the taxable year in which P.L. , c. (C. ) (pending before the Legislature as this bill) takes effect shall be allowed, for the six taxable years beginning after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), a credit against the tax imposed by Title 54A of the New Jersey Statutes (N.J.S.54A:1-1 et seq.), as follows:
(a) For the first, second, and third of those taxable years, the amount of the annual tax credit shall equal 10 percent of the gross amount of the taxpayer's qualified export receipts for the taxable year, provided that the credit shall not exceed, for the first taxable year 100 percent, for the second taxable year 66 2/3 percent, and for the third taxable year 33 1/3 percent, of the amount of the taxpayer's qualified export promotion expenses for the taxable year; and
(b) For the fourth, fifth, and sixth of those taxable years, the amount of the annual tax credit shall equal 10 percent of the amount of the excess of the taxpayer's qualified export promotion expenses for the taxable year over the base amount of those expenses.
(2) A small or medium-sized business taxpayer that had qualified export receipts for any of the three taxable years ending with the taxable year in which P.L. , c. (C. ) (pending before the Legislature as this bill) takes effect shall be allowed, for the three taxable years beginning after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), a credit against the tax imposed by Title 54A of the New Jersey Statutes (N.J.S.54A:1-1 et seq.), in an amount equal to 10 percent of the excess of the taxpayer's qualified export promotion expenses for the taxable years over the base amount of those expenses.
b. The amount of the credit allowed pursuant to this section shall be applied against the tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., after all other credits and payments. If the credit exceeds the amount of tax liability otherwise due, that amount of excess shall be an overpayment for the purposes of N.J.S.54A:9-7, provided, however, that subsection f. of N.J.S.54A:9-7 shall not apply.
c. A partnership shall not be allowed a credit under this section directly, but the amount of credit of a taxpayer in respect of a distributive share of partnership income under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., 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. For the purposes of subsection b. of this section, the amount of tax liability that would be otherwise due of a taxpayer is that proportion of the total liability of the taxpayer that the taxpayer's share of the partnership income or gain included in gross income bears to the total gross income of the taxpayer.
d. As used in this section:
"Base amount" for a taxable year for which a taxpayer claims a credit means the average of the taxpayer's adjusted annual amount of qualified export promotion expenses for the three taxable years immediately preceding that taxable year, provided that the base amount shall not be less than 50 percent of the qualified export promotion expenses for the taxable year for which the taxpayer claims the credit. The annual amount of qualified export promotion expenses for a taxable year used to calculate a base amount shall be adjusted by multiplying the amount of expenses for that taxable year by the fraction, expressed as a decimal, of the implicit price deflator for gross private domestic fixed investment, as determined by the Bureau of Economic Analysis of the United States Department of Commerce, for the taxable year for which a credit is allowable divided by that average price deflator for the prior taxable year.
"Qualified export promotion expenses" means amounts paid (1) to participate in a foreign trade mission or to attend a foreign trade or catalog show, which mission or show is sponsored by the United States Department of Commerce, the United States Foreign and Commercial Service, the United States Department of Education, or any other agency or instrumentality of the United States, or by the New Jersey Economic Development Authority or any other agency or instrumentality of the State, and (2) to compensate an individual or firm for services rendered and expenses incurred for the purpose of promoting the taxpayer's business with foreign buyers by any means, including but not limited to the identification of foreign export markets for the goods or services that the taxpayer offers to sell or render in the regular course of business, the identification of goods or services that the taxpayer does or could offer for sale in foreign markets, the development of foreign sources of financing for the production in this State of goods for foreign export or the recruitment of foreign agents through whom or through which such goods or services might be marketed.
"Qualified export receipts" means "qualified export receipts" as defined by subsection (a) of section 993 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.993).
"Small or medium-sized business taxpayer" means a taxpayer that has its principal place of business in this State and has no more than 250 full-time employees.
3. This act shall take effect immediately.
