Bill Text: NJ S1759 | 2020-2021 | Regular Session | Introduced
Bill Title: Provides gross income tax credits for certain employers for certain costs arising from increase in minimum wage.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2020-02-13 - Introduced in the Senate, Referred to Senate Budget and Appropriations Committee [S1759 Detail]
Download: New_Jersey-2020-S1759-Introduced.html
Sponsored by:
Senator VIN GOPAL
District 11 (Monmouth)
SYNOPSIS
Provides gross income tax credits for certain employers for certain costs arising from increase in minimum wage.
CURRENT VERSION OF TEXT
As introduced.
An Act providing credits against gross income tax for certain employers for certain costs arising from the increase in the minimum wage 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. A taxpayer that is a new employer shall be allowed a credit against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq. for the taxable year, in an amount equal to the sum of the qualified costs associated with the increase in the minimum wage, for each employee employed by the taxpayer on the last day of the taxable year.
b. A taxpayer shall apply for the credit provided pursuant to this section, in a form and manner to be determined by the director, and shall supply the information deemed by the director to be necessary to determine the eligibility of the taxpayer for the credit.
c. The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq. in a taxable year shall be as prescribed by the director.
The amount of the credit applied against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq. for the taxable year shall not reduce a taxpayer's New Jersey gross income tax liability to an amount less than zero.
d. A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a credit directly, but the amount of credit of a taxpayer in respect of a distributive share of entity income, shall be determined by allocating to the taxpayer that proportion of the credit acquired by the entity that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the entity for its taxable year ending within or with the taxpayer's taxable year.
A New Jersey S Corporation shall not be allowed a credit directly under the gross income tax, 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.
e. As used in this section:
"New employer" means a taxpayer that employs ten or fewer employees in this State and that has been in operation in the State for one year or less.
"Qualified costs associated with the increase in the minimum wage" means: (a) the difference in the minimum hourly wage rate, including any adjustments required by law, required to be paid pursuant to the provisions of P.L.1966, c.113 (C.34:11-56a4) as of February 3, 2019, and that required to be paid pursuant to the provisions of P.L.2019, c.32; multiplied by (b) the number of hours worked by the employee during the taxable year.
2. a. A taxpayer that employs 10 or fewer employees in the State during the taxable year and that offers health insurance on the basis of that employment shall be allowed a credit against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq. for the taxable year, in an amount equal to the sum of the qualified costs associated with the increase in the minimum wage, for each employee employed by the taxpayer on the last day of the taxable year.
b. A taxpayer shall apply for a credit provided pursuant to this section, in a form and manner to be determined by the director, and shall supply the information deemed by the director to be necessary to determine the eligibility of the taxpayer for the credit.
c. The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq. in a taxable year shall be as prescribed by the director.
The amount of the credit applied against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq. for the taxable year shall not reduce a taxpayer's New Jersey gross income tax liability to an amount less than zero.
d. A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a credit directly, but the amount of credit of a taxpayer in respect of a distributive share of entity income, shall be determined by allocating to the taxpayer that proportion of the credit acquired by the entity that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the entity for its taxable year ending within or with the taxpayer's taxable year.
A New Jersey S Corporation shall not be allowed a credit directly under the gross income tax, 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.
e. As used in this section:
"Qualified costs associated with the increase in the minimum wage" means: (a) the difference in the minimum hourly wage rate, including any adjustments required by law, required to be paid pursuant to the provisions of P.L.1966, c.113 (C.34:11-56a4) as of February 3, 2019, and that required to be paid pursuant to the provisions of P.L.2019, c.32; multiplied by (b) the number of hours worked by the employee during the taxable year.
3. a. A taxpayer that employs three or fewer employees in this State on the first day of the taxable year shall be allowed a credit against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq. for the taxable year in an amount equal to the sum of the qualified minimum wage expenses for each newly hired employee, not to exceed nine newly hired employees by the taxpayer during the taxable year.
b. A taxpayer shall apply for the credit provided pursuant to this section, in a form and manner to be determined by the director, and shall supply the information deemed by the director to be necessary to determine the eligibility of the taxpayer for the credit.
c. The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq. in a taxable year shall be as prescribed by the director.
The amount of the credit applied against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq. for the taxable year shall not reduce a taxpayer's New Jersey gross income tax liability to an amount less than zero.
d. A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a credit directly, but the amount of credit of a taxpayer in respect of a distributive share of entity income, shall be determined by allocating to the taxpayer that proportion of the credit acquired by the entity that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the entity for its taxable year ending within or with the taxpayer's taxable year.
A New Jersey S Corporation shall not be allowed a credit directly under the gross income tax, 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.
e. As used in this section:
"Newly hired employee" means an individual, not previously employed by the taxpayer, who is hired by the taxpayer during the taxable year and is employed by the taxpayer as of the last day of the taxable year.
"Qualified minimum wage expenses" means: (a) the difference in the minimum hourly wage rate, including any adjustments required by law, required to be paid to an employee pursuant to the provisions of P.L.1966, c.113 (C.34:11-56a4) as of February 3, 2019, and that required to be paid to the employee pursuant to the provisions of P.L.2019, c.32; multiplied by (b) the number of hours worked by a newly hired employee of the taxpayer during the taxable year.
4. A taxpayer shall be allowed to claim only one of the credits provided pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill) for a taxable year.
5. This act shall take effect immediately and apply to taxable years commencing on or after the January 1 next following enactment.
STATEMENT
This bill provides three separate gross income tax credits to assist certain small employers with certain costs arising from the increase in the hourly minimum wage rate required to be paid pursuant to recently enacted law.
The bill provides a gross income tax credit for a new employer in an amount of the sum of the qualified costs associated with the increase in the minimum wage, for each employee employed by the taxpayer on the last day of the taxable year. The bill defines "new employer" as a taxpayer that employs ten or fewer employees in this State and that has been in operation in the State for one year or less. "Qualified costs associated with the increase in the minimum wage" is defined as: (a) the difference in the minimum hourly wage rate, including any adjustments required by law, required to be paid pursuant to the provisions of the State minimum wage law as of February 3, 2019, and that required to be paid pursuant to the provisions of the minimum wage law as amended by P.L.2019, c.32; multiplied by (b) the number of hours worked by the employee during the taxable year.
The bill also provides a gross income tax credit to an employer that employs 10 or fewer employees in the State during the taxable year and that offers health insurance on the basis of that employment. The amount of the credit would be equal to sum of the qualified costs associated with the increase in the minimum wage, for each employee employed by the taxpayer on the last day of the taxable year. The bill defines "qualified costs associated with the increase in the minimum wage" for the purposes of this credit as it does for the new employer credit.
Lastly, the bill provides a gross income tax credit for a taxpayer that employs three or fewer employees in this State during the taxable year. The credit would be in an amount equal to the sum of the qualified minimum wage expenses for a newly hired employee, not to exceed nine newly hired employees by the taxpayer during the taxable year. The bill defines "qualified minimum wage expenses" as: (a) the difference in the minimum hourly wage rate, including any adjustments required by law, required to be paid to the employee pursuant to the provisions of the State minimum wage law as of February 3, 2019, and that required to be paid to the employee pursuant to the provisions of the State minimum wage law as amended by P.L.2019, c.32; multiplied by (b) the number of hours worked by a newly hired employee during the taxable year. "Newly hired employee" is defined as an individual, not previously employed by the taxpayer, who is hired by the taxpayer during the taxable year and is employed by the taxpayer as of the last day of the taxable year.
The bill requires that a taxpayer apply for any of the credits, in a form and manner to be determined by the Director of the Division of Taxation, and supply the information deemed by the director to be necessary to determine the eligibility of the taxpayer for the credit. The credits are nonrefundable, and a taxpayer would be allowed to claim only one of the credits provided by the bill for a taxable year.
The bill would take effect immediately upon enactment and apply to taxable years commencing on or after the January 1 next following enactment.