Bill Text: NJ A434 | 2012-2013 | Regular Session | Introduced
Bill Title: Allows corporation business tax and gross income tax credits, employer unemployment tax rebates, sales tax exemption, property tax freeze and employee skill training program as incentives for business revitalization in distressed shopping centers.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Introduced - Dead) 2012-01-10 - Introduced, Referred to Assembly Appropriations Committee [A434 Detail]
Download: New_Jersey-2012-A434-Introduced.html
STATE OF NEW JERSEY
215th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2012 SESSION
Sponsored by:
Assemblywoman MARY PAT ANGELINI
District 11 (Monmouth)
SYNOPSIS
Allows corporation business tax and gross income tax credits, employer unemployment tax rebates, sales tax exemption, property tax freeze and employee skill training program as incentives for business revitalization in distressed shopping centers.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel
An Act establishing income tax credits, employer unemployment tax rebates, a sales tax exemption, a property tax freeze and an employee skill training program, as incentives for owners of and businesses located in distressed shopping centers, supplementing P.L.1945, c.162 (C.54:10A-1 et seq.), Title 54 of the Revised Statutes, Title 54A of the New Jersey Statutes, P.L.1966, c.30 (C.54:32B-1 et seq.) and Title 42 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A taxpayer that is a developer, owner and manager of a distressed shopping center located in this State shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) in an amount equal to 15% of the amount of the tax liability otherwise due in a privilege period in which the average percent of vacant retail square footage leased to active retail stores or service establishments in the distressed shopping center during the privilege period is less than 10% of the total retail square footage available for lease during that privilege period, but no such credit shall be allowed for any privilege period beyond 10 consecutive privilege periods after the credit is first allowed.
b. An unused credit may be carried forward, if necessary, for use in the 10 privilege periods following the privilege period for which the credit is allowed. The order of priority of the application of the credit allowed under this section and any other credits allowed by law shall be as prescribed by the director. The amount of the credit applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 for a privilege period, together with any other credits allowed by law, shall not exceed 50% of the tax liability otherwise due and shall not reduce the tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162.
c. "Distressed shopping center" as used in this section means a privately owned and operated commercial development, developed, owned and managed as a unit, consisting of a building or a series of buildings on a common site, having at least 35,000 of total square feet of rental space for lease to at least three retail stores or service establishments, and an adjacent parking area to which the public is invited. Provided further, that the shopping center shall have met these requirements for a period of at least 10 privilege periods prior to the privilege period for which the first credit is allowed, and shall have had, for the privilege period prior to the privilege period for which the first credit is allowed, an average rate of vacancy during that privilege period of at least 35% of the total retail square footage available for lease during that privilege period.
2. a. A taxpayer who is a developer, owner and manager of a distressed shopping center located in this State shall be allowed a credit against the tax otherwise due for the taxable year pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to 15% of the amount of the tax liability otherwise due in a taxable year in which the average percent of vacant retail square footage leased to active retail stores or service establishments in the distressed shopping center during the taxable year is less than 10% of the total retail square footage available for lease during that taxable year, but no such credit shall be allowed for any taxable year beyond 10 consecutive taxable years after the credit is first allowed.
b. The amount of the credits applied under this section for a taxable year, when taken together with any other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et seq., shall not exceed 50% of the amount of the taxpayer's liability for tax for the taxable year that bears the same proportional relationship to the total amount of such liability as the amount of the taxpayer's gross income, derived from New Jersey sources and attributable to the taxpayer's business or professional activity related to the distressed shopping center, bears to the taxpayer's entire gross income for that year. The amount of the credit otherwise allowable under this section which cannot be applied for the taxable year due to the limitations of this subsection may be carried over, if necessary to the ten taxable years following the taxable year for which the credit was allowed.
c. "Distressed shopping center" as used in this section means a privately owned and operated commercial development, developed, owned and managed as a unit, consisting of a building or a series of buildings on a common site, having at least 35,000 of total square feet of rental space for lease to at least three retail stores or service establishments, and an adjacent parking area to which the public is invited. Provided further, that the shopping center shall have met these requirements for a period of at least 10 taxable years prior to the taxable year for which the first credit is allowed, and shall have had, for the taxable year prior to the taxable year for which the first credit is allowed, an average rate of vacancy during the taxable year of at least 35% of the total retail square footage available for lease during that taxable year.
3. a. A taxpayer that operates a retail business in a store or other service establishment in a distressed shopping center in this State during a privilege period shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to the amount of $500 for each new full-time employee or full-time employee equivalent employed at that location during the privilege period.
b. An unused credit may be carried forward, if necessary, for use in the 10 privilege periods following the privilege period for which the credit is allowed. The order of priority of the application of the credit allowed under this section and any other credits allowed by law shall be as prescribed by the director. The amount of the credit applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 for a privilege period, together with any other credits allowed by law, shall not exceed 50% of the tax liability otherwise due and shall not reduce the tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162.
c. As used in this section:
"Distressed shopping center" as used in this section means a privately owned and operated commercial development, developed, owned and managed as a unit, consisting of a building or a series of buildings on a common site, having at least 35,000 of total square feet of rental space for lease to at least three retail stores or service establishments, and an adjacent parking area to which the public is invited. Provided further, that the shopping center shall have met these requirements for a period of at least 10 privilege periods prior to the privilege period for which the first credit is allowed, and had, for the privilege period prior to the privilege period for which the first credit is allowed, an avearge rate of vacancy during that privilege period of at least 35% of the total retail square footage available for lease during that privilege period;
"Full-time employee" means an employee working for the taxpayer for at least 140 hours per month on a permanent basis, which does not include employment that is temporary or seasonal, at a wage not less than the State or federal minimum wage, if either minimum wage provision is applicable to the business; and provided further that the hours of part-time employees shall be aggregated to determine the number of full-time employee equivalents; and
"Part-time employee" means an employee working for the taxpayer for at least 20 hours per week for at least six months during the privilege period.
4. a. A taxpayer who operates a retail business in a store or other service establishment in a distressed shopping center in this State during a taxable year shall be allowed a credit against the tax otherwise due for the taxable year pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to the amount of $500 for each new full-time employee or full-time employee equivalent employed at that location during the taxable year.
b. The amount of the credits applied under this section for a taxable year, when taken together with any other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et seq., shall not exceed 50% of the amount of the taxpayer's liability for tax for the taxable year that bears the same proportional relationship to the total amount of such liability as the amount of the taxpayer's gross income, derived from New Jersey sources and attributable to the business or professional activity in which the taxpayer employs such employees at the location of the distressed shopping center, bears to the taxpayer's entire gross income for that year. The amount of the credit otherwise allowable under this section which cannot be applied for the taxable year due to the limitations of this subsection may be carried over, if necessary to the ten taxable years following the taxable year for which the credit was allowed.
c. A partnership shall not be allowed a credit under this section directly, but the amount of credit of a taxpayer in respect of a distributive share of partnership income under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer's taxable year.
d. As used in this section:
"Distressed shopping center" as used in this section means a privately owned and operated commercial development, developed, owned and managed as a unit, consisting of a building or a series of buildings on a common site, having at least 35,000 of total square feet of rental space for lease to at least three retail stores or service establishments, and an adjacent parking area to which the public is invited. Provided further, that the shopping center shall have met these requirements for a period of at least 10 taxable years prior to the taxable year for which the first credit is allowed, and shall have had, for the taxable year prior to the taxable year for which the first credit is allowed, an average rate of vacancy during that taxable year of at least 35% of the total retail square footage available for lease during that taxable year;
"Full-time employee" means an employee working for the taxpayer for at least 140 hours per month on a permanent basis, which does not include employment that is temporary or seasonal, at a wage not less than the State or federal minimum wage, if either minimum wage provision is applicable to the business; and provided further that the hours of part-time employees shall be aggregated to determine the number of full-time employee equivalents; and
"Part-time employee" means an employee working for the taxpayer for at least 20 hours per week for at least six months during the taxable year.
5. An employer that operates a retail business in a store or other service establishment in a distressed shopping center in this State shall be eligible for a rebate based upon the amount of unemployment insurance tax it pays for each new employee employed at that location who had been unemployed and received unemployment compensation benefits for at least 90 days prior to being hired by that employer, or who had been a recipient of public assistance for at least 90 days prior to being hired by that employer. The rebate payments shall commence in the next calendar quarter beginning after the hiring of the new employee and shall be based upon the following schedule:
|
a. First two years employed at the employer's location in a distressed shopping center......... |
.......... an amount equal to 100% of the employer's unemployment insurance payment; |
|
b. Third and fourth years employed at the employer's location in a distressed shopping center ...................................... |
......... an amount equal to 80% of the employer's unemployment insurance payment; |
|
c. Fifth and sixth years employed at the employer's location in a distressed shopping center ....................................... |
......... an amount equal to 60% of the employer's unemployment insurance payment; |
|
d. Seventh and eighth years employed at the employer's location in a distressed shopping center ........................................ |
......... an amount equal to 40% of the employer's unemployment insurance payment; and |
|
e. Ninth and tenth years employed at the employer's location in a distressed shopping center ....................................... |
......... an amount equal to 20% of the employer's unemployment insurance payment. |
No employer with a deficit reserve ratio as provided for in R.S.43:21-7 shall qualify for this award as long as it shall maintain that ratio.
6. a. Retail sales of personal property (except motor vehicles and energy) and sales of services (except telecommunications and utility services) to a qualified business for the exclusive use or consumption of such business within a distressed shopping center in this State are exempt from the taxes imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.).
b. As used in this section:
"Distressed shopping center" means a privately owned and operated commercial development, developed, owned and managed as a unit, consisting of a building or a series of buildings on a common site, having at least 35,000 of total square feet of rental space for lease to at least three retail stores or service establishments, and an adjacent parking area to which the public is invited. Provided further, that the shopping center shall have met these requirements for a period of at least 120 months prior to the first month in which this exemption shall be allowed, and shall have had, for the 12 month period prior to first month in which this exemption is first allowed, an average rate of vacancy of at least 35% of the total retail square footage available for lease during that 12 month period; and
"Qualified business" means a retail business that operates a store or other service establishment in a distressed shopping center and a developer and owner that manages a distressed shopping center.
7. a. The New Jersey Department of Labor and Workforce Development shall develop and coordinate the delivery of skill training programs necessary to meet the needs of qualified businesses in distressed shopping centers. The skill training program shall develop educational programs targeted to employers' needs, and coordinate recruiting, screening, testing and training programs.
b. As used in this section:
"Distressed shopping
center" means a privately owned and operated commercial development,
developed, owned and managed as a unit, consisting of a building or a series of
buildings on a common site, having at least 35,000 of total square feet of
rental space for lease to at least three retail stores or service
establishments, and an adjacent parking area to which the public is invited.
Provided further, that the shopping center shall have met these requirements
for a period of at least 120 months prior to the first month in which this skilled
training program shall begin, and shall have had, for the 12 month period prior
to first month in which this skilled training program shall begin, an average
rate of vacancy
of at least 35% of the total retail square footage available for lease during
that 12 month period; and
"Qualified businesses" means retail businesses that operate stores or other service establishments in a distressed shopping center and receive a rebate based upon the amount of unemployment insurance it pays for new employees pursuant to section 5 of P.L. , c. (C. ) (now pending before the Legislature as this bill).
8. a. As used in this section:
"Base year" means the tax year in which a distressed shopping center reduces an avearge rate of vacancy of at least 35% of the total retail square footage available for lease during the prior tax year to less than 10% of the total retail square footage available for lease during that tax year.
"Distressed shopping center" as used in this section means a privately owned and operated commercial development, developed, owned and managed as a unit, consisting of a building or a series of buildings on a common site, having at least 35,000 of total square feet of rental space for lease to at least three retail stores or service establishments, and an adjacent parking area to which the public is invited. Provided further, that the shopping center shall have met these requirements for a period of at least 10 tax years prior to the base year, and shall have had, for the tax year prior to the base year, an avearge rate of vacancy of at least 35% of the total retail square footage available for lease during that tax year;
"Property tax" means the general property tax due and paid on a distressed shopping center, but does not include special assessments and interest and penalties for delinquent taxes; and
"Tax year" means the calendar year in which a distressed shopping center is assessed and the property tax is levied thereon.
b. An owner of a distressed shopping center shall be eligible in each of the ten tax years subsequent to the base year, on proper claim being made therefor to the director, for a distressed shopping center property tax reimbursement payment equal to the following percentages of the difference between the amount of property tax due and paid in each of those tax years on the distressed shopping center, exclusive of improvements not included in the assessment on the real property for the base year, and the amount of property tax due and paid in the base year, when the amount paid in the base year is the lower amount; but such calculations shall be reduced by any current year property tax reductions resulting from judgments entered by county boards of taxation or the State Tax Court:
Percentage: Years after Base Year:
100% of difference . . . . . First through Third
66% of difference . . . . . Fourth through Sixth
33% of difference . . . . . Seventh through Tenth.
c. An application for a distressed shopping center property tax reimbursement shall be filed with the Director of the Division of Taxation in the Department of the Treasury annually on or before June 1 of the year following the year for which the claim is being made and shall reflect the prerequisites for a distressed shopping center property tax reimbursement on December 31 of the tax year for which the claim is being made; provided, however, that the director may, by rule, designate a later date as the date by which the application shall be filed or waive the requirement for filing an annual application for any year or years subject to any limitations and conditions the director may deem appropriate. The application shall be on a form prescribed by the director and provided for the use of applicants hereunder. Each applicant making a claim for a distressed shopping center property tax reimbursement under this section shall, if required by the director, provide to the director a copy of the current year property tax bill on the distressed shopping center and a copy of the property tax bill for the base year on the same distressed shopping center, or other equivalent proof as permitted by the director.
d. The director shall administer the distressed shopping center property tax reimbursement program. A payment for the distressed shopping center property tax reimbursement amount, as calculated by the director, shall be mailed to each person determined by the director to be an eligible claimant under this act on or before July 15 annually, except that the payment of any distressed shopping center property tax reimbursement amount based upon an application that is filed during the period May 1 through June 1 shall be mailed on or before September 1 annually. Provided further, however, that the payment of any distressed shopping center property tax reimbursement amount based upon an application that is filed during a period after June 1 pursuant to an extended application deadline as may be designated by the director shall be mailed on or before such latter mailing date as the director may determine. All payments made pursuant to this section shall be appropriated annually by the Legislature from the General Fund.
e. When title to a distressed shopping center as to which a distressed shopping center property tax reimbursement is claimed is held by an more than one individual or person, either as tenants in common or as joint tenants, each eligible real property owner shall not be allowed a distressed shopping center property tax reimbursement in an amount in excess of their proportionate share of the taxes assessed against the distressed shopping center, which proportionate share, for the purposes of this section, shall be deemed to be equal to that of each of the other tenants, unless it is shown that the interests in question are not equal, in which event the eligible real property owner's proportionate share shall be as shown. Nothing herein shall preclude more than one tenant, whether title be held in common or joint tenancy, from claiming a distressed shopping center property tax reimbursement from the taxes assessed against the property so held, but no more than the equivalent of one full distressed shopping center property tax reimbursement in regard to such distressed shopping center shall be allowed in any year. In any case in which the eligible real property owners cannot agree as to the apportionment thereof, such distressed shopping center property tax reimbursement shall be apportioned between or among them in proportion to their interest. Property held by husband and wife shall be deemed wholly owned by each tenant, but no more than one full distressed shopping center property tax reimbursement in regard to such distressed shopping center shall be allowed in any year. Right to claim a distressed shopping center property tax reimbursement hereunder shall extend to a distressed shopping center the title to which is held by a partnership, to the extent of the partner's interest as a partner therein, by a guardian, trustee, committee, conservator or other fiduciary for any person who would otherwise be entitled to claim such distressed shopping center property tax reimbursement hereunder, and by a corporation.
9. a. A taxpayer that moves an operating retail business or other operating service establishment to a store or other establishment in a distressed shopping center in this State during a privilege period shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to the following percentages of the distressed shopping center-allocated tax liability otherwise due during the ten privilege periods during which the taxpayer operates the business or establishment at that location:
Percentage of Such Liability: Privilege Periods:
50% ........................... One through Two
40% ................................. Three though Four
30% ................................. Five through Six
20% ................................. Seven through Eight
10% ................................. Nine through Ten.
As used in this section "distressed shopping center-allocated tax liability" means a taxpayer's tax liability determined pursuant to P.L.1945, c.162 multiplied by the applicable fractions determined pursuant to section 6 of P.L.1945, c.162 (C.54:10A-6), except that the numerator shall be such values attributable to that location and the denominator shall be such values attributable to all the taxpayer's business in this State.
b. An unused credit may be carried forward, if necessary, for use in the 10 privilege periods following the privilege period for which the credit is allowed. The order of priority of the application of the credit allowed under this section and any other credits allowed by law shall be as prescribed by the director. The amount of the credit applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 for a privilege period, together with any other credits allowed by law, shall not exceed 50% of the tax liability otherwise due and shall not reduce the tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162.
c. As used in this section "distressed shopping center" means a privately owned and operated commercial development, developed, owned and managed as a unit, consisting of a building or a series of buildings on a common site, having at least 35,000 of total square feet of rental space for lease to at least three retail stores or service establishments, and an adjacent parking area to which the public is invited. Provided further, that the shopping center shall have met these requirements for a period of at least 10 privilege periods prior to the privilege period for which the first credit is allowed, and shall have had, for the privilege period prior to the privilege period for which the first credit is allowed, an average rate of vacancy of at least 35% of the total retail square footage available for lease during that privilege period.
10. The Director of the Division of Taxation in the Department of the Treasury, in cooperation with the Commissioner of the Department of Community Affairs, shall establish a program to allow owners of distressed shopping centers to voluntarily establish through an application to the director that a shopping center that they own in this State meets the requirements of a distressed shopping center. The approval of such an application shall provide notice the owner that they may advertise and otherwise inform any prospective owner thereof and any prospective retail business that may locate therein or is located therein that they be eligible for the tax credits, rebates, reimbursements, exemption and skill training programs that are allowed pursuant to P.L. , c. (C. ) (now pending before the Legislature as this bill).
11. This act shall take effect immediately and sections 1, 3 and 9 shall apply to privilege periods commencing after enactment, sections 2 and 4 shall apply to taxable years commencing after enactment section 6 shall apply to sales made on or after the first day of the second month commencing after enactment, and section 8 shall apply to base years commencing after enactment.
STATEMENT
This bill provides certain tax incentives to encourage the revitalization of partially or completely vacant shopping centers in this State. The owners of and businesses that locate in such distressed shopping centers, may be eligible for income tax credits for lowering that vacancy rate. They may also be eligible for income tax credits for hiring of individuals that were unemployed or receiving public assistance. They may also be eligible for a corporation business tax credit for moving an operating business into a distressed shopping center. This bill defines a distressed shopping centers as shopping centers of at least 35,000 of total square feet of retail rental space, with at least three retail establishments and have been at their location for at least 10 years.
A tax credit of 15% of corporation business tax liability or gross income tax liability is allowed during a tax year for developers and owners of distressed shopping centers if the shopping center reduces a prior year vacancy rate of at least 35% to less than 10% of total available retail rental space. A retailer in a distressed shopping center is allowed a $500 tax credit against its corporation business tax liability or gross income tax liability for each new employee hired at that location during a tax year. A corporation business tax credit based upon a business's distressed shopping center-allocated tax liability is allowed over a period of ten years for a business that moves an operating concern into a distressed shopping center. Also, a retail operator that hires full-time or part-time employees from the ranks of the unemployed or public assistance recipients to work at that location is allowed a rebate of that employer's unemployment insurance payments. A sales tax exemption is extended to the purchases by a qualified businesses in a distressed shopping center of personal property (except of motor vehicles and energy) and services for the exclusive use or consumption of such business in the shopping center. A ten-year partial property tax increase reimbursement is provided by the State to owners of a distressed shopping center commencing after a local tax year in which the vacancy rate is reduced from at least 35% to less than 10% of the available retail rental space. Lastly, a business in a distressed shopping center will be extended a skill training program through the Department of Labor and Workforce Development targeted to those employers' employee recruiting, testing, and training needs.
Under this bill, the Director of the Division of Taxation will establish a program to allow owners of distressed shopping centers to voluntarily establish that a shopping center that they own in this State meets the requirements of a distressed shopping center. This will allow the owner to advertise and otherwise inform any prospective owner thereof and any prospective retail business that may locate therein or is located therein, that they be eligible for the tax credits, rebates, reimbursements, exemption and skill training program provided in the bill.
A number of communities have experienced the economic decline of their long-standing, successful shopping centers after new or larger commercial developments locate within close proximity in another community. The scale and market power of new super-stores locating nearby long-standing and more moderately sized retail facilities located in familiar strip shopping centers can force many of these older retailers to abandon their neighborhood businesses. The tax and other incentives proposed in this bill are intended to encourage these familiar neighborhood commercial centers to cut their vacancy rates and reward their merchants for locating therein, for hiring of more employees, and the hiring of those who have recently not been gainfully employed.
