Bill Text: NJ S2613 | 2016-2017 | Regular Session | Introduced
Bill Title: Provides corporation business tax and gross income tax credits for certain taxpayers that sell qualified medical devices to qualified consumers at discounted price.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Introduced - Dead) 2016-09-29 - Introduced in the Senate, Referred to Senate Health, Human Services and Senior Citizens Committee [S2613 Detail]
Download: New_Jersey-2016-S2613-Introduced.html
Sponsored by:
Senator KEVIN J. O'TOOLE
District 40 (Bergen, Essex, Morris and Passaic)
SYNOPSIS
Provides corporation business tax and gross income tax credits for certain taxpayers that sell qualified medical devices to qualified consumers at discounted price.
CURRENT VERSION OF TEXT
As introduced.
An Act providing a credit against the corporation business tax and the gross income tax for certain taxpayers that sell qualified medical devices to qualified consumers at a discounted price, supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and 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 qualified taxpayer that sells or makes available for sale a qualified medical device to a qualified consumer in this State at a discounted price shall be allowed a credit against the tax otherwise due pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) in an amount equal to the product of the total number of qualified medical devices sold to qualified consumers in this State during the privilege period and the difference between the acquisition cost and the retail sales price of each qualified medical device sold to a qualified consumer in this State during the privilege period.
b. The order of the priority of the application of the credit allowed pursuant to this section and any other credits allowed against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for a privilege period shall be as prescribed by the director.
The amount of the credit applied pursuant to this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) shall not reduce a taxpayer's tax liability to an amount less than the statutory minimum provided by subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5).
The amount of the credit allowed under this section which cannot be used to reduce the taxpayer's tax liability for the privilege period due to the limitations of this subsection may be carried forward and applied to the earliest available use within the 20 privilege periods immediately following the privilege period for which the credit is allowed.
c. As used in this section:
"Acquisition cost" means the cost incurred by the qualified taxpayer to acquire the qualified medical device for resale to a qualified consumer in this State.
"Average wholesale price" means the average wholesale price of the qualified medical device, as calculated and published in the Red Book drug file or other similar comprehensive drug pricing resource as may be designated by the director, on the first day of the first month of the calendar quarter in which the qualified medical device is sold to a qualified consumer in this State.
"Discounted price" means a discounted price of $100 at which the qualified taxpayer sells or makes available for sale a qualified medical device to a qualified consumer in this State.
"Qualified consumer" means an individual purchaser of a qualified medical device that, at the time the purchase is made, does not have pharmacy or other prescription drug benefits or coverage through an insurance provider that can be used to offset or reduce the out-of-pocket cost to the individual purchaser for the purchase of the qualified medical device.
"Qualified medical device" means a federally approved, automated self-injection device that contains a measured dose of epinephrine or other similar compound, substance, or preparation for the emergency treatment of anaphylaxis or other severe allergic reactions in humans, and that is made available for sale to consumers in a two-device per unit pack pursuant to a doctor's prescription at an average wholesale price that is not less than 500 percent of the discounted price of the qualified medical device.
"Qualified taxpayer" means a taxpayer that is the owner or operator of a pharmacy practice site that has been issued a permit by the New Jersey State Board of Pharmacy pursuant to section 30 of P.L.2003, c.280 (C.45:14-69), or a taxpayer that is the owner or operator of a pharmacy located in another state that is registered with the board pursuant to section 34 of P.L.2003, c.280 (C.45:14-73).
"Retail sales price" means the retail price at which the qualified medical device is ultimately sold to the qualified consumer in this State, after any coupons, rebates, or other discounts, provided by the manufacturer or the qualified taxpayer, have been applied to the discounted price of the device.
2. a. A qualified taxpayer that sells or makes available for sale a qualified medical device to a qualified consumer in this State at a discounted price shall be allowed a credit against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq. in an amount equal to the product of the total number of qualified medical devices sold to qualified consumers in this State during the taxable year and the difference between the acquisition cost and the retail sales price of each qualified medical device sold to a qualified consumer in this State during the taxable year.
b. The order of the 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. for a taxable year shall be as prescribed by the director.
The amount of the credit allowed against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq. shall not reduce a taxpayer's tax liability to an amount less than the amount of New Jersey gross income tax liability due for the taxable year.
The amount of the credit allowed under this section which cannot be used to reduce the taxpayer's tax liability for the taxable year due to the limitations of this subsection may be carried forward and applied to the earliest available use within the 20 taxable years immediately following the taxable year for which the credit is allowed.
c. A business entity classified as a partnership for federal income tax purposes shall not be allowed a credit directly under the New Jersey gross income tax, but the amount of credit of a 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 allowed a credit directly under the New Jersey 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.
d. As used in this section:
"Acquisition cost" means the cost incurred by the qualified taxpayer to acquire the qualified medical device for resale to a qualified consumer in this State.
"Average wholesale price" means the average wholesale price of the qualified medical device, as calculated and published in the Red Book drug file or other similar comprehensive drug pricing resource as may be designated by the director, on the first day of the first month of the calendar quarter in which the qualified medical device is sold to a qualified consumer in this State.
"Discounted price" means a discounted price of $100 at which the qualified taxpayer sells or makes available for sale a qualified medical device to a qualified consumer in this State.
"Qualified consumer" means an individual purchaser of a qualified medical device that, at the time the purchase is made, does not have pharmacy or other prescription drug benefits or coverage through an insurance provider that can be used to offset or reduce the out-of-pocket cost to the individual purchaser for the purchase of the qualified medical device.
"Qualified medical device" means a federally approved, automated self-injection device that contains a measured dose of epinephrine or other similar compound, substance, or preparation for the emergency treatment of anaphylaxis or other severe allergic reactions in humans, and that is made available for sale to consumers in a two-device per unit pack pursuant to a doctor's prescription at an average wholesale price that is not less than 500 percent of the discounted price of the qualified medical device.
"Qualified taxpayer" means a taxpayer that is the owner or operator of a pharmacy practice site that has been issued a permit by the New Jersey State Board of Pharmacy pursuant to section 30 of P.L.2003, c.280 (C.45:14-69), or a taxpayer that is the owner or operator of a pharmacy located in another state that is registered with the board pursuant to section 34 of P.L.2003, c.280 (C.45:14-73).
"Retail sales price" means the retail price at which the qualified medical device is ultimately sold to the qualified consumer in this State, after any coupons, rebates, or other discounts, provided by the manufacturer or the qualified taxpayer, have been applied to the discounted price of the device.
3. Notwithstanding any provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the Director of the Division of Taxation in the Department of the Treasury may adopt immediately upon filing with the Office of Administrative Law such rules and regulations as the director determines to be necessary and appropriate to implement and administer the tax credits provided by sections 1 and 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), which rules and regulations shall be effective for a period not to exceed 360 calendar days following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) and may thereafter be amended, adopted, or readopted by the director pursuant to the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).
4. This act shall take effect immediately; provided, however, that section 1 and section 2 shall apply, respectively, to privilege periods and taxable years beginning on or after January 1, 2016.
STATEMENT
This bill provides a credit against the corporation business tax and the gross income tax for certain taxpayers that sell qualified medical devices to qualified consumers at discounted prices. The purpose of the bill is to encourage retail pharmacies and other businesses that operate pharmacy practice sites to sell the automated self-injection devices that contain the life-saving drug used to treat anaphylaxis or other severe allergic reactions in humans at an affordable price to individuals who do not have prescription drug coverage.
Under the bill, each qualified taxpayer that sells or otherwise makes available for sale a qualified medical device to a qualified consumer in this State at a discounted price of $100 is allowed a credit that can be used to reduce the taxpayer's corporation business tax or gross income tax liability. The bill provides that the amount of the credit is equal to the product of the total number of qualified medical devices sold to qualified consumers in this State during the taxpayer's privilege period or taxable year and the difference between the cost incurred by the taxpayer to acquire the device and the retail sales price that each qualified medical device is sold to a qualified consumer in this State during the taxpayer's privilege period or taxable year.
For purposes of the bill, a "qualified medical device" is defined as a federally approved, automated self-injection device that contains a measured dose of epinephrine or other similar compound, substance, or preparation for the emergency treatment of anaphylaxis or other severe allergic reactions in humans, and that is made available for sale to consumers in a two-device per unit pack pursuant to a doctor's prescription at an average wholesale price that is not less than 500 percent of the discounted price of the qualified medical device. The bill defines a "qualified consumer" as an individual purchaser of a qualified medical device that, at the time the purchase is made, does not have pharmacy or other prescription drug benefits or coverage through an insurance provider that can be used to offset or reduce the out-of-pocket cost to the individual purchaser for the purchase of the qualified medical device.
The bill authorizes the Director of the Division of Taxation in the Department of the Treasury to adopt rules and regulations necessary to implement and administer the tax credits allowed by the bill, and permits the immediate filing of those rules and regulations with the Office of Administrative Law, effective for a period not to exceed 360 days following the bill's effective date.
The bill takes effect immediately upon enactment, but provides for the sections allowing the tax credits to apply to privilege periods and taxable years beginning on or after January 1, 2016.
