Bill Text: NJ S2875 | 2022-2023 | Regular Session | Introduced
Bill Title: Allows taxpayers to utilize alternative method of depreciation of certain expenditures in connection with construction of new affordable housing developments.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2022-11-03 - Referred to Senate Budget and Appropriations Committee [S2875 Detail]
Download: New_Jersey-2022-S2875-Introduced.html
Sponsored by:
Senator TROY SINGLETON
District 7 (Burlington)
SYNOPSIS
Allows taxpayers to utilize alternative method of depreciation of certain expenditures in connection with construction of new affordable housing developments.
CURRENT VERSION OF TEXT
As introduced.
An Act allowing taxpayers to utilize alternative method of depreciation for certain expenditures under corporation business and gross income taxes, 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. Notwithstanding paragraph (12) of subsection (k) of section 4 of P.L.1945, c.162 (C.54:10A-4), for purposes of calculating the depreciation deduction allowed pursuant to the Corporation Business Tax Act (1945), P.L.1945, c.162 (C.54:10A-1 et seq.), a taxpayer shall be allowed to depreciate a percentage of eligible property expenditures, as that percentage is determined and computed pursuant to subsection b. of this section, over a ten-year period.
b. For purposes of calculating the percentage of eligible property expenditures depreciated by a taxpayer pursuant to subsection a. of this section, the taxpayer shall apply the following formula: 2 x (the number of affordable housing units in the development / the number of non-affordable housing units in the development).
c. The Director of the Division of Taxation in the Department of the Treasury shall prescribe the rules and regulations necessary to carry out the provisions of this section.
d. As used in this section:
"Affordable housing development" means a development that includes one or more units of housing, at least 20 percent of which qualify as affordable housing.
"Affordable housing" means housing occupied or restricted to occupancy by households with income no greater than 80 percent of the regional median income, including, but not limited to, housing that is deed restricted as affordable pursuant to the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.).
"Eligible property expenditures" means capital expenditures incurred by the taxpayer in connection with the construction of a new affordable housing development owned by the taxpayer.
"Non-affordable housing" means housing that does not qualify as affordable housing.
2. a. Notwithstanding section 26 of P.L.2004, c.65 (C.54A:5-1.2), for purposes of calculating the depreciation deduction allowed under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., a taxpayer shall be allowed to depreciate a percentage of eligible property expenditures, as that percentage is determined and computed pursuant to subsection b. of this section, over a ten-year period.
b. For purposes of calculating the percentage of eligible property expenditures depreciated by a taxpayer pursuant to subsection a. of this section, the taxpayer shall apply the following formula: 2 x (the number of affordable housing units in the development / the number of non-affordable housing units in the development).
c. The Director of the Division of Taxation in the Department of the Treasury shall prescribe the rules and regulations necessary to carry out the provisions of this section.
d. As used in this section:
"Affordable housing development" means a development that includes one or more units of housing, at least 20 percent of which qualify as affordable housing.
"Affordable housing" means housing occupied or restricted to occupancy by households with income no greater than 80 percent of the regional median income, including, but not limited to, housing that is deed restricted as affordable pursuant to the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.).
"Eligible property expenditures" means capital expenditures incurred by the taxpayer in connection with the construction of a new affordable housing development owned by the taxpayer.
"Non-affordable housing" means housing that does not qualify as affordable housing.
3. This act shall take effect immediately and shall apply to eligible property expenditures incurred on and after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill).
STATEMENT
This bill allows taxpayers to depreciate a percentage of eligible property expenditures, meaning capital expenditures incurred by the taxpayer in connection with the construction of a new affordable housing development owned by the taxpayer, over a ten-year period.
For purposes of calculating the percentage of eligible property expenditures that may be depreciated by a taxpayer pursuant to the bill, the taxpayer is to apply the following formula: 2 x (the number of affordable housing units in the development / the number of non-affordable housing units in the development).
Under the bill, "affordable housing development" means a development that includes one or more units of housing, at least 20 percent of which qualify as affordable housing. The bill defines "affordable housing" as housing occupied or restricted to occupancy by households with income no greater than 80 percent of the regional median income, including, but not limited to, housing that is deed restricted as affordable pursuant to the "Fair Housing Act," P.L.1985, c.222 (C.52:27D-301 et al.).
