Bill Text: NJ SCR76 | 2022-2023 | Regular Session | Introduced
Bill Title: Urges Congress and President to enact legislation which prohibits awarding federal contracts to inverted domestic corporations.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2022-02-28 - Introduced in the Senate, Referred to Senate Transportation Committee [SCR76 Detail]
Download: New_Jersey-2022-SCR76-Introduced.html
SENATE CONCURRENT RESOLUTION No. 76
STATE OF NEW JERSEY
220th LEGISLATURE
INTRODUCED FEBRUARY 28, 2022
Sponsored by:
Senator SHIRLEY K. TURNER
District 15 (Hunterdon and Mercer)
SYNOPSIS
Urges Congress and President to enact legislation which prohibits awarding federal contracts to inverted domestic corporations.
CURRENT VERSION OF TEXT
As introduced.
A Concurrent Resolution urging the United States Congress and the President to enact legislation which prohibits the awarding of federal contracts to inverted domestic corporations.
Whereas, Pursuant to a rule adopted by the federal government, an inverted domestic corporation is defined as a corporation that used to be incorporated in the United States, or used to be a partnership in the United States, but is now incorporated in a foreign country, or is a subsidiary whose parent corporation is incorporated in a foreign country; and
Whereas, Business analysts note that commonly in an inversion, a U.S. company sets up or buys another company in a country with a lower corporate tax rate and then calls the new country home, thereby avoiding the taxes it would otherwise be obligated to pay to the United States; and
Whereas, Critics of the practice note that when a company undertakes an inversion, it moves its legal address outside of this country and some of its personnel and office operation from the United States, where the combined State and local tax rate is close to 26 percent, to a country such as Ireland where the corporate tax rate is 12.5 percent; and
Whereas, Former United States Treasury Secretary Jack Lew, speaking during the Obama administration, called on Congress to pass legislation to crack down on mergers in which companies use an inversion, and invoked the need for "economic patriotism" in reversing a practice that has flourished in recent years; and
Whereas, While the rate of inversions has slowed since subsequent Treasury and other agency regulations were issued, tax-motivated inversions represent a significant cost to the United States economy; and
Whereas, Although the United States has a relatively higher tax rate than other countries that are members of the Organization for Economic Co-operation and Development, most U.S. companies can take advantage of a long list of tax credits, subsidies, incentives, and other loopholes that enable them to pay little to zero tax; and
Whereas, Several members of Congress are responding to the concerns about the detrimental effect on the country of inversions by sponsoring legislation to impede the practice; and
Whereas, Legislation currently pending before Congress prohibits the awarding of contracts by any executive agency, including the Department of the Defense, to any entity, including a foreign incorporated entity, that is determined to be an inverted domestic corporation or any subsidiary of such an entity, unless a waiver is granted to the entity because of its importance for national security; and
Whereas, It is fitting and proper for this Legislature to express its concern over the inversion process and to urge Congress and the President to enact legislation prohibiting it; now, therefore,
Be It Resolved by the Senate of the State of New Jersey (the General Assembly concurring):
1. This Legislature urges the United States Congress and the President to enact legislation which prohibits the awarding of federal contracts to inverted domestic corporations.
2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by Clerk of the General Assembly or the Secretary of the Senate to the President and Vice President of the United States, to the President Pro Tempore and to the Majority Leader and the Minority Leader of the United States Senate, and to the Speaker and the Majority Leader and the Minority Leader of the United States House of Representatives, and to every member of Congress elected from this State.
STATEMENT
This concurrent resolution urges the United States Congress and the President to enact legislation which prohibits the awarding of federal contracts to inverted domestic corporations. Pursuant to a rule adopted by the federal government, an inverted domestic corporation is defined as a corporation that used to be incorporated in the United States, or used to be a partnership in the United States, but is now incorporated in a foreign country, or is a subsidiary whose parent corporation is incorporated in a foreign country.
