Bill Text: NJ A4457 | 2020-2021 | Regular Session | Introduced
Bill Title: Establishes tax credit for constructing or renovating homes in accordance with universal design principles.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2020-07-27 - Introduced, Referred to Assembly Housing Committee [A4457 Detail]
Download: New_Jersey-2020-A4457-Introduced.html
Sponsored by:
Assemblywoman VALERIE VAINIERI HUTTLE
District 37 (Bergen)
SYNOPSIS
Establishes tax credit for constructing or renovating homes in accordance with universal design principles.
CURRENT VERSION OF TEXT
As introduced.
An Act providing gross income tax credits for constructing or renovating homes in accordance with universal design principles, 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. a. As used in this section:
"Commissioner" means the Commissioner of Community Affairs.
"Department" means the Department of Community Affairs.
"Homestead" means:
(1) a dwelling house and the land on which that dwelling house is located which constitutes the place of the taxpayer's domicile and is owned and used by the taxpayer as the taxpayer's principal residence;
(2) a dwelling house situated on land owned by a person other than the taxpayer which constitutes the place of the taxpayer's domicile and is owned and used by the taxpayer as the taxpayer's principal residence;
(3) a condominium unit or a unit in a horizontal property regime or a continuing care retirement community which constitutes the place of the taxpayer's domicile and is owned and used by the taxpayer as the taxpayer's principal residence.
In addition to the generally accepted meaning of owned or ownership, a homestead shall be deemed to be owned by a person if that person is a tenant for life or a tenant under a lease for 99 years or more, is entitled to and actually takes possession of the homestead under an executory contract for the sale thereof or under an agreement with a lending institution which holds title as security for a loan, or is a resident of a continuing care retirement community pursuant to a contract for continuing care for the life of that person which requires the resident to bear, separately from any other charges, the proportionate share of property taxes attributable to the unit that the resident occupies;
(4) a unit in a cooperative or mutual housing corporation which constitutes the place of domicile of a residential shareholder or lessee therein, or of a lessee or shareholder who is not a residential shareholder therein, which is used by the taxpayer as the taxpayer's principal residence; and
(5) a unit of residential rental property, which unit constitutes the place of the taxpayer's domicile and is used by the taxpayer as the taxpayer's principal residence.
"Home improvement" means a renovation project requiring a building permit, which increases the accessibility of an existing homestead for a senior citizen.
"Landlord" means the person or persons who own or purport to own the building, structure, or complex of buildings or structures in which those rental dwellings are situated.
"Principal residence means" means a homestead actually and continually occupied by a taxpayer as the taxpayer's permanent residence, as distinguished from a vacation home, property owned and rented or offered for rent by the taxpayer, and other secondary real property holdings.
"Purchase of a new homestead" means the transaction involving the first sale of a new constructed residence or dwelling that conforms to the standards required under the 2018 International Building Code, as adopted by New Jersey.
"Retrofitting" means a home improvement, in accordance with universal design guidelines issued by the department and conforming to the standards required under the 2018 International Building Code, as adopted by New Jersey.
"Senior citizen" means a resident who is allowed to claim a personal deduction as a taxpayer 65 years of age or over pursuant to paragraph 3 of subsection (b) of N.J.S.54A:3-1.
"Universal design" means the design of products and environments to be usable by all people to the greatest extent possible without the need for adaptation or specialized design.
b. (1) A taxpayer shall be allowed a credit against the tax otherwise due for the taxable year pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. in the amount of $5,000 for the purchase of a new homestead constructed in accordance with universal design guidelines promulgated by the department in accordance with subsection g. of this section;
(2) A taxpayer who is a senior citizen with a New Jersey taxable income of $100,000 or less shall be allowed a tax credit against the tax otherwise due for the taxable year pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to 50 percent of the total amount expended, not to exceed $5,000, for the retrofitting of a homestead which qualifies as a taxpayer's principal residence, in accordance with the universal design guidelines and standards promulgated by the department pursuant to subsection g. of this section.
(3) A taxpayer who is a landlord shall be allowed a credit against the tax otherwise due for the taxable year pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., equal to 50 percent of the total amount expended, but not to exceed $10,000, to retrofit a homestead in accordance with the universal design guidelines and standards promulgated by the department pursuant to subsection g. of this section. No tax credit shall be allowed under this paragraph (3) for the retrofitting of a homestead that qualifies as the taxpayer's principal residence.
c. Tax credits for eligible costs shall be awarded for the taxable year during which the retrofitting has been completed. A taxpayer shall submit an application for a tax credit to the department. The department shall determine the taxpayer's eligibility for a tax credit and the amount of the tax credit and shall issue a certification awarding the tax credit to the taxpayer. When filing a tax return that includes a claim for a tax credit pursuant to this section, the taxpayer shall include a copy of the certification. In no case shall the agency approve more than one application for tax credits relating to the same retrofitting work.
d. The director shall prescribe the order of the priority of the application of the tax credit allowed under this section and any other credits allowed by law against the tax imposed under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. If the amount of tax credits claimed pursuant to this section, together with any other payments or credits against the tax, reduces the tax liability due for the taxable year to zero, then the taxpayer may carry forward any amount of credit remaining for use in the next three taxable years. No amount of expense claimed as a tax credit pursuant to this section shall be awarded as an amount calculated or claimed pursuant to any other credit against the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.
e. A business entity that is classified as a partnership for federal income tax purposes shall not be allowed the tax credit directly under N.J.S.54:1-1 et seq., but the amount of the of credit of the 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 New Jersey S Corporation shall not be awarded a credit directly under this section, 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. 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 tax credit using an application to be made available by the director. The due date for a tax credit application shall coincide with the due date for annual gross income tax returns.
g. The commissioner shall promulgate guidelines and standards on universal design features to make structures and dwellings accessible for senior citizens, which guidelines and standards shall be posted on the department's website. The guidelines and standards promulgated pursuant to this section may be integrated into barrier free subcode adopted by the commissioner pursuant to the "State Uniform Construction Code Act," P.L.1975, c.217 (C.52:27D-119 et seq.) and in accordance with the provisions of section 5 of P.L.2005, c.350 (C.52:27D-123.15).
2. This act shall take effect immediately and apply to taxable years beginning on or after January 1 next following enactment.
STATEMENT
This bill authorizes the award of tax credits to purchasers of new homesteads constructed in accordance with universal design guidelines, and to senior citizens and landlords who improve accessibility of existing residences through the application of universal design principles.
The bill allows a taxpayer to earn a $5,000 tax credit for the purchase of a new homestead constructed in accordance with universal design guidelines. It also allows a senior citizen to earn a tax credit of $5,000 for the purchase of a new residence or 50 percent of the total amount expended, but not in excess of $5,000, for the retrofitting of an existing residence. Eligibility for the tax credit for the retrofitting of a taxpayer's own residence is limited to resident taxpayers 65 years of age or over with a New Jersey taxable income of $100,000 or less. Similarly, a landlord may earn a tax credit of 50 percent of the total amount expended, but not in excess of $10,000, for the retrofitting of a homestead that is not the landlord's principal residence.
Under the bill, a taxpayer would apply for a certification from the Department of Community Affairs (DCA) that certifies the taxpayer's eligibility for tax credits and the amount of tax credits that the State Treasurer may award to the taxpayer under the bill. Upon certification, the DCA would submit a copy of the certification of the taxpayer. When filing a tax return that includes a claim for tax credits under this bill, the taxpayer will include a copy of the certification.
Tax credits may be awarded for the taxable year in which the retrofitting was completed. A taxpayer may carry forward any unused portion thereof, if necessary, for use in the next three taxable years.
Universal design is the design of products and environments to be usable by all people to the greatest extent possible without the need for adaptation or specialized design. According to the United States Access Board, universal design embraces seven principles: equitable use, flexibility in use, simple and intuitive use, perceptible information, tolerance for error, low physical effort, and size and space for approach and use.
