Bill Text: NJ A717 | 2012-2013 | Regular Session | Introduced
Bill Title: Prohibits imposition of the corporation business tax on certain foreign corporations that only store personal property in this State incident to its importation.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2012-01-10 - Introduced, Referred to Assembly Appropriations Committee [A717 Detail]
Download: New_Jersey-2012-A717-Introduced.html
STATE OF NEW JERSEY
215th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2012 SESSION
Sponsored by:
Assemblyman RUBEN J. RAMOS, JR.
District 33 (Hudson)
Co-Sponsored by:
Assemblyman DeAngelo
SYNOPSIS
Prohibits imposition of the corporation business tax on certain foreign corporations that only store personal property in this State incident to its importation.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act prohibiting the imposition of the corporation business tax on certain foreign corporations by reason of their storage of certain personal property in this State, amending P.L.1945, c.162.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 2 of P.L.1945, c.162 (C.54:10A-2) is amended to read as follows:
2. Every domestic or foreign corporation which is not hereinafter exempted shall pay an annual franchise tax for each year, as hereinafter provided, for the privilege of having or exercising its corporate franchise in this State, or for the privilege of deriving receipts from sources within this State, or for the privilege of engaging in contacts within this State, or for the privilege of doing business, employing or owning capital or property, or maintaining an office, in this State. And such franchise tax shall be in lieu of all other State, county or local taxation upon or measured by intangible personal property used in business by corporations liable to taxation under this act.
A foreign corporation shall not be deemed to be deriving receipts, engaging in contacts, doing business, employing or owning capital or property in the State, for the purposes of this act, by reason of (1) the maintenance of cash balances with banks or trust companies in this State, or (2) the ownership of shares of stock or securities in this State if such shares or securities are pledged as collateral security, or deposited with one or more banks or trust companies or brokers who are members of a recognized security exchange, in safekeeping or custody accounts, or (3) the taking of any action by any such bank or trust company or broker, which is incidental to the rendering of safekeeping or custodian service to such corporation, or (4) notwithstanding any provisions of this section to the contrary, the receipt, acceptance, transportation, handling or storage in this State of tangible personal property, imported into the United States and held in storage in this State for purposes of federal inspection or testing incident to its importation, prior to the first shipment of the property after the storage for purposes of federal inspection or testing incident to its importation.
A taxpayer's exercise of its franchise in this State is subject to taxation in this State if the taxpayer's business activity in this State is sufficient to give this State jurisdiction to impose the tax under the Constitution and statutes of the United States.
(cf: P.L.2002, c.40, s.1)
2. This act shall take effect immediately and apply privilege periods ending after its date of enactment.
STATEMENT
This bill stops the imposition of the corporation business tax on foreign corporations whose only contact with the State of New Jersey is that their property is warehoused in New Jersey for inspection or testing after the property has been imported from outside of the United States. The ports of the Mid-Atlantic region are important ports of entry in international commerce, and many goods are subject to customs inspection, federal Food and Drug Administration inspection or federal Department of Agriculture inspection before they may be distributed in this country. Warehousing and storage in New Jersey pending federal inspection and pending shipment after inspection are important ancillary services this State provides to the regional commerce and are a significant component of the New Jersey economy.
Under current law, a corporation can become subject to the corporation business tax by reason of owning property in New Jersey. A corporation that has no activity in New Jersey other than the storage of its property in a public warehouse while the property is waiting to clear customs or other inspection is subject to the corporation business tax. This bill limits the corporation business tax so that it is not imposed on a corporation whose only connection with this State is that it stores its imported property in New Jersey for federal inspection or testing incident to the property's importation or receives other services to the imported property connected with that storage.
