Bill > S114

Introduced Session

This bill provides credits against the New Jersey gross income tax and corporation business tax, as applicable, to vineyards and wineries for qualified capital expenses, as defined in the bill, in an amount equal to 25 percent of the qualified capital expenses made in connection with the establishment of a new vineyard or winery or the capital improvements made to an existing vineyard or winery during each taxable year or privilege period in which the qualified vineyard or winery is operated for a profit by the taxpayer. Under the bill, a "qualified capital expense" means all expenditures made by the taxpayer for the purchase and installation of equipment or agricultural materials for use in the production of agricultural products at a vineyard or winery, but not for use on preserved farmland, including examples of which are provided in the bill. The amount of credit allowed is to be taken by the taxpayer to reduce the tax otherwise due and required to be paid for the taxable year to which the credit applies. A credit is only to be taken by the taxpayer to reduce the tax otherwise due and required to be paid for the taxable year in which the vineyard or winery is conducted or operated for a profit by the taxpayer. The bill would provide that the total value of the grants of tax credits approved by the Director of Taxation (director) that may be applied against a gross income and corporation tax liability for a privilege period shall not exceed an aggregate annual limit of $3,000,000. Each gross income taxpayer or individual vineyard or winery paying corporation business tax would be allowed a total of $250,000 in tax credits to be taken over a 10 year period, and no more than $50,000 per tax year or privilege period, as applicable. If the amount of tax credits applied for by taxpayers exceeds the aggregate annual limit of $3,000,000, then a taxpayer who has first applied for and has not been allowed a tax credit amount for that reason would then be allowed, in the order in which they have submitted an application, their approved amount of tax credit on the first day of the next succeeding privilege period in which tax credits are issued and are not in excess of the amount of credits available. The bill permits a taxpayer, who is allowed a gross income tax credit pursuant to the bill but whose gross income tax liability in the taxable year in which the credit is received is less than the amount of the credit, to either: 1) carry forward the unapplied portion of the credit and apply the credit to the gross income tax liability of the taxpayer in the next 10 taxable years; or 2) receive the unapplied portion of the credit as a refund. The bill provides that a taxpayer who is allowed a corporation business tax credit pursuant to the bill may not reduce the taxpayer's corporation business tax liability in a privilege period to an amount less than the applicable statutory minimum provided by law. Under the bill, a taxpayer is not to be permitted to take any credits to reduce or offset the New Jersey gross income tax liability or corporation tax liability that is incurred and required to be paid by the taxpayer in connection with the conduct or operation of a vineyard or winery unless the taxpayer has obtained prior written authorization from the director. The director is to establish an application process and prescribe the form and manner through which a taxpayer may make and file an application to obtain the director's written authorization for the allowance of a credit. Under the bill, the director is to review each application made and filed by a taxpayer and make a determination regarding the approval of an application seeing the director's written authorization for the allowance of accredit within 90 calendar days of the date a complete application is received. The director is to issue a written authorization for the allowance of a credit to each taxpayer that made and filed a complete application that has been reviewed and approved by the director within five calendar days of the date the director's determination is made. Each taxpayer issued a written authorization for the allowance of a credit is to include a copy of the director's authorization when filing a return that includes a claim for the credit. If the director fails to make a determination regarding the approval of an application seeking the director's written authorization for the allowance of a credit within 90 calendar days of the date a complete application is received, or if the director fails to issue a written authorization for the allowance of a credit within five calendar days of the date the director's determination is made, the application is to be deemed to have been approved and the written authorization is to be deemed to have been issued by the director. Each taxpayer that made and filed a complete application but fails to receive a determination from the director is to include a copy of the taxpayer's application when filing a return that includes a claim for the credit allowed.

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Jim Beach (D)*,  Nilsa Cruz-Perez (D)*, 

Introduced in the Senate, Referred to Senate Economic Growth Committee (on 01/09/2024)

Official Document