New Jersey-2012-A708-Introduced

An Act providing for a temporary gross income tax credit for certain commuting passes and designated as the New Jersey Commuter Pass Credit Act, supplementing Title 54A of the New Jersey Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. For each of the first three taxable years beginning on or after the January 1 next following the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), a taxpayer shall be allowed a credit against the tax otherwise due under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to eight percent of the proportion of the purchase price paid by the taxpayer during the taxable year for a qualified commuting pass that the amount of qualified commuting completed by use of the qualified commuting pass during the taxable year bears to the total commuting completed by use of the qualified commuting pass during the taxable year, but that amount of credit shall not exceed $100.

For individuals filing a joint return pursuant to subsection a. of N.J.S.54A:2-1, the maximum credit allowed pursuant to this section shall be $100 per individual.

b. On or before August 1 of the third calendar year beginning on or after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the director shall prepare and submit a report to the Governor and the Legislature, in accordance with section 2 of P.L.1991, c.164 (C.52:14-19.1), addressing the credit allowed pursuant to this section. The report shall include the total value of credits allowed in the first taxable year beginning on or after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill), the total value of credits allowed in the first taxable year beginning on or after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) by taxpayer income levels which are defined by $10,000 increments, the total value of credits the director projects would be allowed for the second and third taxable years beginning on and after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) and each of the immediately succeeding three taxable years if the credit were to be renewed, estimates of the foregone revenue attributable to this credit for each of the three taxable years beginning on or after the date of enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) and each of the immediately succeeding three taxable years if the credit were to be renewed, information on the division's experience in implementing this section including but not limited to a description of increased workload associated with the credit, and an analysis as to the effectiveness of the credit as an incentive for encouraging the use of qualified commuting passes for qualified commuting and as a financial relief instrument for taxpayers who rely on qualified commuting passes for qualified commuting.

c. In addition to the rulemaking authority granted to the director pursuant to N.J.S.54A:9-17, the director is authorized to adopt such rules and regulations that are necessary to administer this section. The director's rulemaking authority includes but is not limited to rules and regulations necessary to ensure that the credit allowed pursuant to this section is limited to the use of qualified commuting passes for qualified commuting, to provide methods of calculating creditable amounts pursuant to subsection a. of this section, and to provide the appropriate units of measurement for those calculations based on the type of qualified commuting pass. Rules and regulations deemed necessary by the director pursuant to this subsection shall be adopted in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

d. As used in this section:

"Ferry passenger service" means ferry passenger service as defined pursuant to section 3 of the "New Jersey Public Transportation Act of 1979," P.L.1979, c.150 (C.27:25-3).

"Motorbus regular route service" means motorbus regular route service as defined pursuant to section 3 of the "New Jersey Public Transportation Act of 1979," P.L.1979, c.150 (C.27:25-3).

"Qualified commuting" means traveling from or to the taxpayer's principal residence to or from the taxpayer's workplace, or termini near those places, one of which is located in this State, for the primary purpose of reporting to the taxpayer's workplace to render work related services or returning therefrom.

"Qualified commuting pass" means a pass purchased by a taxpayer for a purchase price of no less than $30 that the taxpayer uses to ride rail passenger service, motorbus regular route service or ferry passenger service.

"Rail passenger service" means rail passenger service as defined pursuant to section 3 of the "New Jersey Public Transportation Act of 1979," P.L.1979, c.150 (C.27:25-3).

2. This act shall take effect immediately.

STATEMENT

Designated as the New Jersey Commuter Pass Credit Act, this bill provides for a temporary gross income tax credit for eight percent of the amount a taxpayer spends on qualified commuting passes for qualified commuting, but which is not to exceed $100 of credit per taxable year. The purpose of this bill is to provide some financial relief to New Jersey taxpayers who rely on train, bus or ferry to get to work and to incentivize the use of those modes of transportation.

Under the bill a taxpayer may take a gross income tax credit for eight percent of the portion of the purchase price paid for a qualified commuting pass which is in proportion to the amount of qualified commuting undertaken with the pass. The credit is not to exceed $100 of credit per taxable year. The bill takes effect immediately, but the credit is available for the three taxable years beginning on or after the January 1 next following the date of enactment. A qualified commuting pass includes passes for train, bus or ferry service which taxpayers purchase for their use at a price of no less than $30. Qualified commuting is limited to travel between the taxpayer's home and work, or termini near those places, one of which is located in the State, for the primary purpose of reporting to the taxpayer's workplace to render work related services or returning therefrom.

The bill also requires the Director of the Division of Taxation to complete a report on the credit, which is to be submitted to the Governor and Legislature in August of the third year of the credit so as to enable consideration of the renewal or expiration thereof.