Bill
Bill > S640
summary
Introduced
01/09/2024
01/09/2024
In Committee
01/09/2024
01/09/2024
Crossed Over
Passed
Dead
01/12/2026
01/12/2026
Introduced Session
2024-2025 Regular Session
Bill Summary
This bill provides New Jersey farmers with a credit against their annual New Jersey gross income tax determined by using income averaging (averaging out yearly gains and losses or varying levels of gains over a four-year period) from their farming business. The value of the credit is equal to the difference between a New Jersey farmer's income without four-year farming income averaging and with farming income averaging. The maximum annual credit allowed is $5,000. Farmers are faced with a variety of risks that impact the economic viability of their farming operations. Risks associated with production, weather, financial management, marketing and labor influence the potential for success. In order to assist farmers, the federal government enacted income averaging provisions that would permit farmers to have more control over the cyclical nature of agricultural risks and even out their tax liabilities for a more secure future. This New Jersey tax credit will provide farmers with New Jersey gross income tax relief in taxable years that follow the less profitable years of their New Jersey farming business.
AI Summary
This bill allows New Jersey farmers to claim a credit against their state income tax by using a method called "farm income averaging," which smooths out income fluctuations over a four-year period to better manage tax liabilities, especially after less profitable years. The credit is calculated as the difference between the tax owed without averaging and the tax owed with farm income averaging, with a maximum annual credit of $5,000. The bill defines key terms such as "farming business" (a trade or business solely focused on cultivating land or raising agricultural or horticultural commodities), "farming income" (net profit or loss from such a business), and "farm averaging income" (the sum of current year and prior three years' farming income, divided by four, with losses treated as zero and years without farming disregarded). This provision aims to provide financial relief to farmers who face significant risks like unpredictable weather and market fluctuations, mirroring a similar federal provision.
Committee Categories
Business and Industry
Sponsors (1)
Last Action
Introduced in the Senate, Referred to Senate Economic Growth Committee (on 01/09/2024)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.njleg.state.nj.us/bill-search/2024/S640 |
| BillText | https://pub.njleg.gov/Bills/2026/S1000/640_I1.HTM |
| BillText | https://pub.njleg.gov/Bills/2024/S1000/640_I1.HTM |
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