Bill
Bill > S2676
NJ S2676
NJ S2676Allows farm operators to accelerate depreciation of certain expenditures under corporation business and gross income taxes.
summary
Introduced
02/12/2024
02/12/2024
In Committee
02/12/2024
02/12/2024
Crossed Over
Passed
Dead
01/12/2026
01/12/2026
Introduced Session
2024-2025 Regular Session
Bill Summary
This bill allows farm operators to accelerate certain tax deductions for business expenses for purposes of calculating State corporation business tax and gross income tax, matching two provisions of the federal tax code. Specifically, the bill allows the accelerated depreciation of assets to the extent allowed under section 168 of the federal Internal Revenue Code, and the immediate deduction of certain capital expenses to the extent allowed under section 179 of the federal Internal Revenue Code. Generally, under section 167 of the federal Internal Revenue Code, taxpayers are allowed to deduct a reasonable allowance for the wear and tear, or depreciation, of an asset used in trade or business. Sections 168 and 179 allow an accelerated depreciation if certain conditions are met. New Jersey, however, decoupled its tax law from those provisions following changes to those provisions in the early 2000s. Instead of allowing depreciation as allowed under current federal law, the State currently allows depreciation as federal law allowed it in 2002 for section 179 and in 2001 for sections 167 and 168. Since that time, further modifications were made to sections 168 and 179. Under current section 179, a taxpayer may deduct up to $1 million of qualified assets purchased and placed in service in the tax year. The deduction cannot exceed taxable income, and the deduction is phased out if a company's total qualified assets placed in service during the year exceed $2.5 million. The limits and thresholds for the section 179 deduction are scheduled to be indexed for inflation in future years. Under current section 168, a taxpayer may depreciate an additional 60 percent of the adjusted cost of eligible property. This "bonus" depreciation is scheduled to decrease by 20 percent in 2025 and every year thereafter until it reaches 0 percent in 2027.
AI Summary
This bill allows farm operators to accelerate tax deductions for certain business expenses when calculating their State corporation business tax and gross income tax, aligning New Jersey's tax laws with two specific provisions of the federal tax code. Specifically, it permits farm businesses to take advantage of accelerated depreciation for assets as allowed under Section 168 of the federal Internal Revenue Code, which enables taxpayers to deduct a larger portion of an asset's cost in the early years of its use, and to immediately deduct certain capital expenses, up to a specified limit, as permitted by Section 179 of the federal Internal Revenue Code, rather than spreading those deductions over many years. New Jersey had previously "decoupled" from these federal provisions, meaning its tax laws no longer automatically followed changes made at the federal level, and instead used older federal rules for depreciation. This bill effectively reconnects New Jersey's tax treatment of these farm-related capital expenditures to current federal standards, providing immediate tax relief to farmers.
Committee Categories
Business and Industry
Sponsors (1)
Last Action
Introduced in the Senate, Referred to Senate Economic Growth Committee (on 02/12/2024)
Official Document
bill text
bill summary
Loading...
bill summary
Loading...
bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.njleg.state.nj.us/bill-search/2024/S2676 |
| BillText | https://pub.njleg.gov/Bills/2026/S3000/2676_I1.HTM |
| BillText | https://pub.njleg.gov/Bills/2024/S3000/2676_I1.HTM |
Loading...