Bill Text: NJ A1306 | 2024-2025 | Regular Session | Introduced
Bill Title: Provides CBT and GIT credits for completion of qualified construction projects at abandoned commercial building sites.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Introduced) 2024-01-09 - Introduced, Referred to Assembly State and Local Government Committee [A1306 Detail]
Download: New_Jersey-2024-A1306-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Assemblyman ALEX SAUICKIE
District 12 (Burlington, Middlesex, Monmouth and Ocean)
SYNOPSIS
Provides CBT and GIT credits for completion of qualified construction projects at abandoned commercial building sites.
CURRENT VERSION OF TEXT
As introduced.
An Act providing corporation business tax and gross income tax credits for the completion of qualified construction projects at abandoned commercial building sites, and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and chapter 4 of Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. (1) For privilege periods beginning on or after January 1 next following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), and subject to the limitations of subsection e. of this section, a taxpayer shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), as calculated pursuant to paragraph (2) of this subsection, for the qualified construction costs incurred by the taxpayer during the privilege period for the completion of a qualified construction project at the site of an abandoned commercial building in the State.
(2) The amount of the credit authorized pursuant to this section shall not exceed the lesser of: (a) 25 percent of the total qualified construction costs incurred by the taxpayer during the privilege period; or (b) $1,000,000.
b. To qualify for the tax credit allowed pursuant to this section, a taxpayer shall apply to the division for a certification that provides: (1) that the qualified construction project meets the requirements of this section; and (2) the amount of the tax credit calculated pursuant to subsection a. of this section.
c. The application shall demonstrate that the taxpayer completed the qualified construction project before applying for the tax credit provided in this section. The application shall include a receipt demonstrating the qualified construction costs incurred by the taxpayer and any other information determined relevant by the division. Upon certification, the division shall submit a copy of the certification to the taxpayer.
d. The director shall prescribe the order of priority of the application of the tax credit allowed pursuant to this section, and any other credits allowed against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for the privilege period. The amount of the credit applied pursuant to this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) shall not reduce a taxpayer's tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5). The amount of the tax credit otherwise allowable under this section which cannot be applied for the privilege period due to the limitations of this subsection or under other provisions of P.L.1945, c.162 (C.54:10A-1 et seq.) may be carried forward, if necessary, to the seven privilege periods following the privilege period for which the tax credit was allowed.
e. The value of tax credits provided by the director pursuant to this section and pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall not exceed a cumulative total of $5 million
f. The division shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations as are necessary to implement the provisions of this section.
g. No later than one year after the expiration date of the tax credits provided pursuant to this section, the division shall prepare and submit to the Governor, the State Treasurer, and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature, a report that, at a minimum, summarizes the effectiveness of the tax credit in incentivizing the replacement of abandoned commercial buildings with newly constructed commercial buildings.
h. As used in this section:
"Commercial building" means a building of at least 100,000 square feet that is used for commercial purposes.
"Director" means Director of the Division of Taxation in the Department of the Treasury.
"Division" means the Division of Taxation in the Department of the Treasury.
"Qualified construction costs" means costs incurred in connection with the completion of a qualified construction project.
"Qualified construction project" means any of the following: the demolition of an abandoned commercial building; the construction of a new commercial building at the demolition site of an abandoned commercial building; the removal of debris from the demolition site of an abandoned commercial building; the remediation of a demolition site; or the repurposing of an abandoned commercial building.
"Remediation" means the investigation, analysis, planning, monitoring, acquisition, removal, containment, remediation, construction, or improvement of any real property or building necessary or desirable for the cleanup of actual, potential, or perceived environmental contamination or pollution, including without limitation, water pollution, air pollution, pollution caused by solid waste disposal, thermal pollution, radiation contamination, or other general environmental contamination or pollution which is or may become injurious to the environment or to the public health, safety, or welfare.
2. a. (1) For taxable years beginning on or after January 1 next following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), and subject to the limitations of subsection e. of this section, a taxpayer shall be allowed a credit against the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., as calculated pursuant to paragraph (2) of this subsection, for any qualified construction costs incurred by the taxpayer during the taxable year for the completion of a qualified construction project at the site of an abandoned commercial building in the State.
(2) The amount of the credit authorized pursuant to this section shall not exceed the lesser of: (a) 25 percent of the total qualified construction costs incurred by the taxpayer during the taxable year; or (b) $1,000,000.
b. To qualify for the tax credit allowed pursuant to this section, a taxpayer shall apply to the division for a certification that provides: (1) that the qualified construction project meets the requirements of this section; and (2) the amount of the tax credit calculated pursuant to subsection a. of this section.
c. The application shall demonstrate that the taxpayer completed the qualified construction project before applying for the tax credit provided in this section. The application shall include a receipt demonstrating the qualified construction costs incurred by the taxpayer and any other information determined relevant by the division. Upon certification, the division shall submit a copy of the certification to the taxpayer.
d. The order of priority of the application of the credit allowed pursuant to this section, and any other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et seq. for a taxable year, shall be as prescribed by the director. The amount of the credit applied under this section against the New Jersey gross income tax imposed pursuant to N.J.S.54A:1-1 et seq. for a taxable year, when taken together with any other payments, credits, deductions, and adjustments allowed by law, shall not reduce a taxpayer's tax liability to an amount less than zero. The amount of the tax credit otherwise allowable under this section which cannot be applied for the taxable year due to the limitations of this section or other provisions of N.J.S.54A:1-1 et seq. may be carried forward, if necessary, to the seven taxable years following the taxable year for which the tax credit was allowed.
e. The value of tax credits provided by the director pursuant to this section and pursuant to section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall not exceed a cumulative total of $5 million.
f. The division shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations as are necessary to implement the provisions of this section.
g. No later than one year after the expiration date of the tax credits provided pursuant to this section, the division shall prepare and submit to the Governor, the State Treasurer, and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), to the Legislature, a report that, at a minimum, summarizes the effectiveness of the tax credit in incentivizing the replacement of abandoned commercial buildings with newly constructed commercial buildings.
h. As used in this section:
"Commercial building" means a building of at least 100,000 square feet that is used for commercial purposes.
"Director" means Director of the Division of Taxation in the Department of the Treasury.
"Division" means the Division of Taxation in the Department of the Treasury.
"Qualified construction costs" means costs incurred in connection with the completion of a qualified construction project.
"Qualified construction project" means any of the following: the demolition of an abandoned commercial building; the construction of a new commercial building at the demolition site of an abandoned commercial building; the removal of debris from the demolition site of an abandoned commercial building; the remediation of a demolition site; or the repurposing of an abandoned commercial building.
"Remediation" means the investigation, analysis, planning, monitoring, acquisition, removal, containment, remediation, construction, or improvement of any real property or building necessary or desirable for the cleanup of actual, potential, or perceived environmental contamination or pollution, including without limitation, water pollution, air pollution, pollution caused by solid waste disposal, thermal pollution, radiation contamination, or other general environmental contamination or pollution which is or may become injurious to the environment or to the public health, safety, or welfare.
3. This act shall take effect immediately.
STATEMENT
The bill provides corporation business tax and gross income tax credits for any qualified construction costs incurred by a taxpayer for the completion of a qualified construction project at the site of an abandoned commercial building in the State. The bill defines "commercial building" as a building of at least 100,000 square feet that is used for commercial purposes. Under the bill, a "qualified construction project" includes any of the following: the demolition of an abandoned commercial building; the construction of a new commercial building at the demolition site of an abandoned commercial building; the removal of debris from the demolition site of an abandoned commercial building; the remediation of a demolition site; or the repurposing of an abandoned commercial building.
The amount of the tax credit is capped at the lesser of the following: (1) 25 percent of the qualified construction costs incurred by the taxpayer during the privilege period or taxable year; or (2) $1,000,000.
To qualify for the tax credit allowed under the bill, a taxpayer would be required to apply to the Division of Taxation in the Department of the Treasury for a certification that provides: (1) that the qualified construction project meets the requirements of the bill; and (2) the amount of the tax credit calculated pursuant to the bill.
The bill requires the division to adopt rules and regulations as are necessary to implement the bill's provisions. The bill would also limit the cumulative total of tax credits awarded pursuant to the bill to $5 million.
Finally, the bill would require, no later than one year after the expiration of the tax credits provided pursuant to the bill, the division to prepare and submit to the Governor, the State Treasurer, and the Legislature a report that, at a minimum, summarizes the effectiveness of the tax credit in incentivizing the replacement of abandoned commercial buildings with newly constructed commercial buildings.
Construction of commercial buildings throughout the State has increased exponentially during recent years. Many commercial buildings have been constructed on the State's farmland, which has adversely impacted the State's farming sector. Construction of commercial buildings on farmland decreases the amount of land in the State that is able to be used for farming purposes and, in many cases, destroys prime soil, which is limited to areas where the soil naturally occurs and, once destroyed, cannot be recreated. Farmland is an important economic and environmental resource for New Jersey and, for this reason, it is important take steps to ensure farmland is used for farming purposes and not converted into commercial buildings.
Lands currently used for commercial purposes should continue to be used for commercial purposes. For this reason, abandoned commercial buildings should be replaced with newly constructed commercial buildings at the same location. This bill would encourage the development of commercial buildings throughout the State while also protecting the State's farmland.
