Bill > A974

Introduced Session

This bill provides businesses with credits against the corporation business tax and the gross income tax for certain employer-provided child care expenditures. The bill permits businesses subject to the corporation business tax or the gross income tax to apply a credit against the tax liability otherwise due for a percentage of eligible expenditures made to acquire, construct, reconstruct, renovate, or otherwise improve real property to be used as a qualified child care center. The bill also permits businesses to apply a separate, additional credit for a percentage of eligible expenditures made in connection with the provision of certain child care services. The bill provides that the amount of the credit allowed for the construction of a child care center is equal to 50 percent of the cost paid or incurred by a business to acquire, construct, reconstruct, renovate, or otherwise improve real property in this State that is to be used by the business, or another person under contract or agreement with the business, to conduct, maintain, and operate a qualified child care center primarily for the children of individuals employed by the business. The bill provides that the amount of the credit allowed for the provision of child care services is equal to: -- 50 percent of the cost paid or incurred by a business to conduct, maintain, and operate a qualified child care center of the business that is used primarily by the children of individuals employed by the business; -- 50 percent of the amount paid by a business to another person to conduct, maintain, and operate, under contract or agreement with the business, a qualified child care center of the business that is used primarily by the children of individuals employed by the business; -- 50 percent of the amount paid by a business to another person, under contract or agreement with the business, for the provision of child care to children of individuals employed by the business at a qualified child care center; or -- 10 percent of the cost paid or incurred by a business for the provision, by the business or by another person under contract or agreement with the business, of qualified child care information and referral services to individuals employed by the business. The bill provides that to be eligible to apply the credit for the construction of a child care center a business must make and enter into an agreement with the Director of the Division of Taxation in the Department of the Treasury. The bill specifies that the agreement must require the business to demonstrate the intended use and status of the real property acquired, constructed, reconstructed, renovated, or otherwise improved in this State, and require the business to use that property to conduct, maintain, and operate a qualified child care center primarily for the children of individuals employed by the business for a 60-month period. The bill provides that, under the credit for the construction of a child care center, a business may make and file an application with the Director of the Division of Taxation for a tax credit transfer certificate in lieu of being allowed any amount of the credit against the tax liability of the business. The bill specifies that, if issued, the certificate may be sold to a another person that may have a tax liability under certain other State taxes in exchange for private financial consideration, but stipulates that the sale cannot be made for consideration of less than 75 percent of the transferred credit amount. The bill defines a "qualified child care center" as a facility that is licensed as a child care center by the Department of Children and Families, but specifically excludes from that definition facilities licensed by the department if: the principal use of the facility is for some purpose other than the care, development, and supervision of children; the facility is not used on a regular basis to provide for the care, development, and supervision of children; enrollment in the facility is not open to children of individuals employed by the business claiming the credit; or use of the facility is limited or restricted under procedures, criteria, or other systems of selection that unfairly discriminate. The bill takes effect immediately and applies to privilege periods and taxable years beginning on or after January 1 next following the date of enactment. The purpose of this bill is to encourage New Jersey businesses to take a more active role in the provision of child care to employees and their children. Businesses that are active in providing child care typically have a more engaged and productive workforce and play an integral part in reducing the overall demand for quality, affordable child care in this State.

AI Summary

Committee Categories

Nancy Muñoz (R)*,  William Sampson (D)*,  Reginald Atkins (D),  Clinton Calabrese (D),  Aura Dunn (R),  Verlina Reynolds-Jackson (D), 

Introduced, Referred to Assembly Children, Families and Food Security Committee (on 01/09/2024)

Official Document