Bill
Bill > A3094
NJ A3094
NJ A3094Disallows tax deduction under corporation business tax and gross income tax for punitive damages paid in connection with legal action; includes amount paid as punitive damages on behalf of taxpayer in income for tax purposes.
summary
Introduced
02/24/2020
02/24/2020
In Committee
02/24/2020
02/24/2020
Crossed Over
Passed
Dead
01/11/2022
01/11/2022
Introduced Session
2020-2021 Regular Session
Bill Summary
This bill disallows tax deductions under the corporation business tax and the gross income tax for punitive damages paid or incurred in connection with a judgment in or settlement of a legal action and includes in a taxpayer's taxable income the amount paid to, or on behalf of, the taxpayer as insurance or otherwise by reason of the taxpayer's liability or agreement to pay punitive damages. Under current law, a corporation or an individual business owner may deduct the cost of court-ordered punitive damages as an "ordinary business expense." This tax loophole allows companies to wreak horrible damage to public assets and private property, destroying lives and livelihoods, and write it off as a cost of doing business. This bill eliminates that tax break, and requires corporations risking environmental destruction to face the true costs of their actions.
AI Summary
This bill disallows tax deductions under the corporation business tax and the gross income tax for punitive damages paid or incurred in connection with a judgment or settlement of a legal action. The bill also requires corporations to include the amount paid as punitive damages on their behalf in their taxable income. Under current law, corporations could deduct the cost of court-ordered punitive damages as an ordinary business expense, creating a tax loophole that allowed companies to write off the costs of causing damage to public assets, private property, and people's livelihoods. This bill eliminates that tax break and aims to ensure corporations face the true costs of their actions, particularly when it comes to environmental destruction.
Committee Categories
Justice
Sponsors (1)
Last Action
Introduced, Referred to Assembly Judiciary Committee (on 02/24/2020)
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| BillText | https://www.njleg.state.nj.us/2020/Bills/A3500/3094_I1.HTM |
| Bill | https://www.njleg.state.nj.us/2020/Bills/A3500/3094_I1.PDF |
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