Bill Text: NJ S813 | 2014-2015 | Regular Session | Introduced
Bill Title: Provides corporation business tax credit and gross income tax credit for qualified wages of certain veterans.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2014-01-14 - Introduced in the Senate, Referred to Senate Military and Veterans' Affairs Committee [S813 Detail]
Download: New_Jersey-2014-S813-Introduced.html
STATE OF NEW JERSEY
216th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2014 SESSION
Sponsored by:
Senator JAMES BEACH
District 6 (Burlington and Camden)
SYNOPSIS
Provides corporation business tax credit and gross income tax credit for qualified wages of certain veterans.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act establishing a corporation business tax credit and gross income tax credit for qualified wages of certain veterans, 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. For privilege periods commencing on or after January 1, 2013 but before January 1, 2016, a taxpayer shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to the value of ten percent of qualified wages paid in the privilege period to a qualified veteran in the course of sustained employment. Provided however, for a privilege period the credit shall not be allowed in an amount exceeding $1,200 for each qualified veteran.
(1) The order of 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, added together with any other credit allowed against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), shall not exceed 50% of the tax liability otherwise due and shall not reduce the tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162.
Unused credit resulting from the limitations of this paragraph (1) may be carried forward, if necessary, for use in the seven privilege periods following the privilege period for which the credit is allowed.
(2) A taxpayer shall not be granted a credit pursuant to this section for the qualified wages paid to a qualified veteran in a privilege period if the qualified wages of the qualified veteran or the job providing qualified wages to the qualified veteran is included in the calculation of another credit against any State tax or a grant pursuant to P.L.1996, c.26 (C.34:1B-124 et seq.) for a period of time that coincides with the applicable privilege period.
(3) If the director determines that a taxpayer is displacing employees and replacing the employees with qualified veterans for the primary purposes of obtaining the credit allowed pursuant to this section, the director shall deny the credit allowed under this section for the taxpayer and shall issue a tax assessment for the recapture of credit previously allowed to the taxpayer under this section plus an assessment of 50% of any credit subject to recapture as penalty.
b. As used in this section:
"Sustained employment" means a period of time no less than 185 business days during the taxable year in which a qualified veteran is earning qualified wages.
"Qualified veteran" means a resident of this State initially hired by the taxpayer on or after January 1, 2007 that has been honorably discharged or released under honorable circumstances from active service, occurring on or after January 1, 1990, in any branch of the Armed Forces of the United States.
"Qualified wages" mean any salaries, wages and remuneration subject to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., paid to a qualified veteran on or after January 1, 2013 but before January 1, 2016 for labor rendered in service to an enterprise of the taxpayer.
2. a. For taxable years commencing on or after January 1, 2013 but before January 1, 2016, a taxpayer shall be allowed a credit against the tax due pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to the value of ten percent of qualified wages paid in the taxable year to a qualified veteran in the course of sustained employment. Provided however, for a taxable year the credit shall not be allowed in an amount exceeding $1,200 for each qualified veteran.
(1) A credit allowed pursuant to this section shall not reduce the tax liability otherwise due pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., for a taxable year to less than zero.
Unused credit resulting from the limitations of this paragraph (1) may be carried forward if necessary to the seven taxable years following the taxable year for which the credit was allowed. The form and method of carry forward shall be as prescribed by the director.
(2) A taxpayer shall not be granted a credit pursuant to this section for the qualified wages paid to a qualified veteran in a taxable year if the qualified wages of the qualified veteran or the job providing qualified wages to the qualified veteran is included in the calculation of another credit against any State tax or a grant pursuant to P.L.1996, c.26 (C.34:1B-124 et seq.) for a period of time that coincides with the applicable taxable year.
(3) If the director determines that a taxpayer is displacing employees and replacing the employees with qualified veterans for the primary purposes of obtaining the credit allowed pursuant to this section, the director shall deny the credit allowed under this section for the taxpayer and shall issue a tax assessment for the recapture of credit previously allowed to the taxpayer under this section plus an assessment of 50% of any credit subject to recapture as penalty.
b. As used in this section:
"Sustained employment" means a period of time no less than 185 business days during the privilege period in which a qualified veteran is earning qualified wages.
"Qualified veteran" means a resident of this State initially hired by the taxpayer on or after January 1, 2007 that has been honorably discharged or released under honorable circumstances from active service, occurring on or after January 1, 1990, in any branch of the Armed Forces of the United States.
"Qualified wages" mean any salaries, wages and remuneration subject to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., paid to a qualified veteran on or after January 1, 2013 but before January 1, 2016 for labor rendered in service to an enterprise of the taxpayer.
3. This act shall take effect immediately.
STATEMENT
This bill provides a corporation business tax credit and gross income tax credit for qualified wages of certain veterans. The purpose of this bill is to provide an incentive to employers to employ veterans of recent active military service in the midst of current economic challenges.
The two credits established by this bill provide an employer with a credit in the amount of 10% of the wages paid to a qualified veteran. The credits may not exceed $1,200 for each qualified veteran per tax year. The bill defines a qualified veteran as a resident of this State initially hired by the taxpayer on or after January 1, 2007 that has been honorably discharged or released under honorable circumstances from active service, occurring on or after January 1, 1990, in any branch of the Armed Forces of the United States. The bill requires that for purposes of the credits' availability the wages of a qualified veteran must be subject to the gross income tax and paid on or after January 1, 2013 but before January 1, 2016. To be creditable, wages must also arise from employment of a qualified veteran for at least 185 days of the applicable tax year.
Additionally, the bill contains two provisions aimed at preventing potential misuse of the credits. Taxpayers are prohibited from simultaneously using the wages or employment of a qualified veteran to qualify for one of these credits and any other generally available employment incentive that comes in the form of a State tax credit or certain grant. The bill also empowers the Director of the Division of Taxation to recapture the credits afforded under this bill, plus an additional 50% penalty, if the Director determines that the employer displaced employees to replace them with qualified veterans for the primary purpose of taking advantage of this credit.
The credits established by this bill are limited in duration in that they are available for tax years commencing on or after January 1, 2013 but before January 1, 2016.
