Bill Text: NJ S2217 | 2016-2017 | Regular Session | Introduced
Bill Title: Provides credit against CBT and gross income tax for generators that collect, reuse, and recycle hard-to-recycle materials.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2016-05-23 - Introduced in the Senate, Referred to Senate Environment and Energy Committee [S2217 Detail]
Download: New_Jersey-2016-S2217-Introduced.html
Sponsored by:
Senator CHRISTOPHER "KIP" BATEMAN
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
SYNOPSIS
Provides credits against CBT and gross income tax for generators that collect, reuse, and recycle certain hard-to-recycle materials.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning tax credits for the collection, reuse, and recycling of certain materials, and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. A generator that collects, reuses, and recycles qualifying materials, or that provides for such collection, reuse, and recycling, after those materials have been used by consumers, shall be allowed a credit against the tax due pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) in an amount as hereinafter provided:
(1) for the privilege period beginning on or after January 1, 2016, but before January 1, 2017, 20 percent of the costs paid or incurred by the generator to collect, reuse, and recycle qualifying materials pursuant to the generator's approved plan;
(2) for the privilege period beginning on or after January 1, 2017, but before January 1, 2018, 16 percent of the costs paid or incurred by the generator to collect, reuse, and recycle qualifying materials pursuant to the generator's approved plan;
(3) for the privilege period beginning on or after January 1, 2018, but before January 1, 2019, 12 percent of the costs paid or incurred by the generator to collect, reuse, and recycle qualifying materials pursuant to the generator's approved plan;
(4) for the privilege period beginning on or after January 1, 2019, but before January 1, 2020, 8 percent of the costs paid or incurred by the generator to collect, reuse, and recycle the qualifying materials pursuant to the generator's approved plan; and
(5) for the privilege period beginning on or after January 1, 2020, but before January 1, 2021, 4 percent of the costs paid or incurred by the generator to collect, reuse, and recycle the qualifying materials pursuant to the generator's approved plan.
The amount of credit claimed pursuant to this section shall not exceed the estimate of costs approved by the commissioner pursuant to subsection b. of this section.
b. (1) To be eligible for the tax credit pursuant to this section, a generator, prior to conducting, or providing for, any collection, reuse, and recycling activities, shall submit to the commissioner an application in writing outlining: (a) the generator's plan, for one or more privilege periods, for the collection, reuse, and recycling of qualifying materials; and (b) an estimate of costs, for one or more privilege periods, for implementing the plan. The commissioner, upon receipt of the application, shall review and either approve or deny the application within 45 days. Upon approval of the application, the commissioner shall submit a copy thereof to the generator and to the director.
(2) When filing a tax return that includes a claim for a credit pursuant to this section, the generator shall include: (a) a copy of the approved application; (b) a statement that the generator has undertaken, or provided for, the collection, reuse, and recycling activities described in the approved plan; and (c) receipts of actual costs for implementing the approved plan.
c. A plan submitted by a generator pursuant to paragraph (1) of subsection b. of this section shall include:
(1) a list of qualifying materials, and their estimated quantities, to be collected, reused, and recycled by the generator or organization working on behalf of the generator;
(2) a list of the collection, reuse, and recycling activities to be undertaken by the generator or organization working on behalf of the generator;
(3) a list of collection and recovery site locations Statewide at which consumers may return and dispose of qualifying materials, if provided for in the plan;
(4) a list and description of any collection events sponsored by the generator or organization working on behalf of the generator at which consumers may return and dispose of qualifying materials, if provided for in the plan;
(5) the generator's collection, reuse, and recycling targets, by tonnage and percentage of qualifying materials recovered, and a description of how the plan will meet those targets;
(6) a list of organizations collecting, reusing, recycling, transporting, or otherwise handling qualifying materials on behalf of the generator pursuant to subsection d. of this section;
(7) any consumer education activities undertaken by the generator or organization working on behalf of the generator to encourage consumers to return qualifying materials, if provided for in the plan; and
(8) any other information determined relevant by the department pursuant to rules and regulations.
d. In lieu of conducting its own collection, reuse, and recycling activities pursuant to this section, a generator may designate an organization to conduct the activities on its behalf. Any generator, or organization acting on behalf of a generator pursuant to this subsection, shall possess all of the appropriate federal, State, and local licenses and permits for the collection, reuse, recycling, transportation, and handling of qualifying materials.
e. 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 section 5 of P.L.1945, c.162 (C.54:10A-5) for a privilege period shall be as prescribed by the director. 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 for a privilege period 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).
f. If the director determines that a taxpayer has obtained a credit pursuant to this section by fraud or misrepresentation or has failed to comply with the provisions of this section, the director shall deny the taxpayer the credit and shall assess the amount of credit previously allowed to the taxpayer pursuant to this section as a deficiency.
g. As used in this section:
"Approved plan" means the plan submitted by the generator and approved by the commissioner pursuant to paragraph (1) of subsection b. of this section, for the collection, reuse, and recycling of qualifying materials.
"Commissioner" means the Commissioner of Environmental Protection.
"Department" means the Department of Environmental Protection.
"Generator" means a person who manufacturers, distributes, or offers for retail sale in the State any qualifying materials.
"Person" means any individual, partnership, company, corporation, society, firm, consortium, joint venture, or any commercial or other legal entity.
"Qualifying material" means any material produced, sold, or distributed by a generator for use in the State which is not collected for recycling in at least five counties pursuant to section 3 of P.L.1987, c.102 (C.13:1E-99.13), but for which a feasible and beneficial method of reuse or recycling exists, as determined by the department.
"Recycle" means any process used to transform discarded products, components, or by-products into new usable or marketable materials, and which process may cause those discarded products, components, or by-products to lose their original composition or identity.
"Reuse" means the return of a product into the economic stream for use in the same kind of application originally intended for the product, without a change in the product's original composition or identity.
h. The commissioner, in cooperation with the director, shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations necessary for the implementation of this section, which may include:
(1) a list of qualifying materials that may be collected, reused, and recycled pursuant to this section;
(2) reasonable targets to be achieved by generators for the collection, reuse, and recycling of qualifying materials, calculated by either tonnage or a percentage of the qualifying materials generated by generators;
(3) a list of acceptable collection, reuse, and recycling activities that may be undertaken pursuant to this section;
(4) a list of qualified costs that may be paid or incurred by the generator for the collection, reuse, and recycling of qualifying materials pursuant to this section;
(5) the form and manner of the application submitted to the department pursuant to paragraph (1) of subsection b. of this section;
(6) licensing or permitting requirements for organizations collecting, reusing, and recycling qualifying materials on behalf of generators pursuant to subsection d. of this section; and
(7) the creation of a logo which a generator who successfully meets the targets established by the department, and outlined in the generator's plan, may use in the promotion of that generator's products.
i. The department, the division, and the New Jersey Economic Development Authority shall post on their respective Internet websites the requirements for generators to claim the tax credit established under this section
j. The department, in cooperation with the division and the New Jersey Economic Development Authority, shall prepare and submit a report to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), the Legislature on the effectiveness of the credit as an incentive for encouraging generators to collect, reuse, and recycle qualifying materials. The report shall be submitted before the fifth taxable year or privilege period in which a credit may be claimed.
2. a. A generator that collects, reuses, and recycles qualifying materials, or that provides for such collection, reuse, and recycling, after those materials have been used by consumers, shall be allowed a credit against the tax due pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount as hereinafter provided:
(1) for the taxable year beginning on or after January 1, 2016, but before January 1, 2017, 20 percent of the costs paid or incurred by the generator to collect, reuse, and recycle qualifying materials pursuant to the generator's approved plan;
(2) for the taxable year beginning on or after January 1, 2017, but before January 1, 2018, 16 percent of the costs paid or incurred by the generator to collect, reuse, and recycle qualifying materials pursuant to the generator's approved plan;
(3) for the taxable year beginning on or after January 1, 2018, but before January 1, 2019, 12 percent of the costs paid or incurred by the generator to collect, reuse, and recycle qualifying materials pursuant to the generator's approved plan;
(4) for the taxable year beginning on or after January 1, 2019, but before January 1, 2020, 8 percent of the costs paid or incurred by the generator to collect, reuse, and recycle the qualifying materials pursuant to the generator's approved plan; and
(5) for the taxable year beginning on or after January 1, 2020, but before January 1, 2021, 4 percent of the costs paid or incurred by the generator to collect, reuse, and recycle the qualifying materials pursuant to the generator's approved plan.
The amount of credit claimed pursuant to this section shall not exceed the estimate of costs approved by the commissioner pursuant to subsection b. of this section.
b. (1) To be eligible for the tax credit pursuant to this section, a generator, prior to conducting, or providing for, any collection, reuse, and recycling activities, shall submit to the commissioner an application in writing outlining: (a) the generator's plan, for one or more taxable years, for the collection, reuse, and recycling of qualifying materials; and (b) an estimate of costs, for one or more taxable years, for implementing the plan. The commissioner, upon receipt of the application, shall review and either approve or deny the application within 45 days. Upon approval of the application, the commissioner shall submit a copy thereof to the generator and to the director.
(2) When filing a tax return that includes a claim for a credit pursuant to this section, the generator shall include: (a) a copy of the approved application; (b) a statement that the generator has undertaken, or provided for, the collection, reuse, and recycling activities described in the approved plan; and (c) receipts of actual costs for implementing the approved plan.
c. A plan submitted by a generator pursuant to paragraph (1) of subsection b. of this section shall include:
(1) a list of qualifying materials, and their estimated quantities, to be collected, reused, and recycled by the generator or organization working on behalf of the generator;
(2) a list of the collection, reuse, and recycling activities to be undertaken by the generator or organization working on behalf of the generator;
(3) a list of collection and recovery site locations Statewide at which consumers may return and dispose of qualifying materials, if provided for in the plan;
(4) a list and description of any collection events sponsored by the generator or organization working on behalf of the generator at which consumers may return and dispose of qualifying materials, if provided for in the plan;
(5) the generator's collection, reuse, and recycling targets, by tonnage and percentage of qualifying materials recovered, and a description of how the plan will meet those targets;
(6) a list of organizations collecting, reusing, recycling, transporting, or otherwise handling qualifying materials on behalf of the generator pursuant to subsection d. of this section;
(7) any consumer education activities undertaken by the generator or organization working on behalf of the generator to encourage consumers to return qualifying materials, if provided for in the plan; and
(8) any other information determined relevant by the department pursuant to rules and regulations.
d. In lieu of conducting its own collection, reuse, and recycling activities pursuant to this section, a generator may designate an organization to conduct the activities on its behalf. Any generator, or organization acting on behalf of a generator pursuant to this subsection, shall possess all of the appropriate federal, State, and local licenses and permits for the collection, reuse, recycling, transportation, and handling of qualifying materials.
e. The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq. in a taxable year shall be as prescribed by the director. A credit allowed pursuant to this section shall not reduce the tax liability otherwise due pursuant to N.J.S.54A:1-1 et seq., for a taxable year to an amount less than zero.
f. A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a credit directly, but the amount of credit of a taxpayer in respect of a distributive share of entity income, shall be determined by allocating to the taxpayer that proportion of the credit acquired by the entity that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the entity for its taxable year ending within or with the taxpayer's taxable year.
A New Jersey S Corporation shall not be allowed a credit directly under the gross income tax, but the amount of credit of a taxpayer in respect of a pro rata share of S Corporation income, shall be determined by allocating to the taxpayer that proportion of the credit acquired by the New Jersey S Corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro rata share of S Corporation income of the New Jersey S Corporation for its privilege period ending within or with the taxpayer's taxable year.
g. If the director determines that a taxpayer has obtained a credit pursuant to this section by fraud or misrepresentation or has failed to comply with the provisions of this section, the director shall deny the taxpayer the credit and shall assess the amount of credit previously allowed to the taxpayer pursuant to this section as a deficiency.
h. As used in this section:
"Approved plan" means the plan submitted by the generator and approved by the commissioner pursuant to paragraph (1) of subsection b. of this section, for the collection, reuse, and recycling of qualifying materials.
"Commissioner" means the Commissioner of Environmental Protection.
"Department" means the Department of Environmental Protection.
"Generator" means a person who manufacturers, distributes, or offers for retail sale in the State any qualifying materials.
"Person" means any individual, partnership, company, corporation, society, firm, consortium, joint venture, or any commercial or other legal entity.
"Qualifying material" means any material produced, sold, or distributed by a generator for use in the State which is not collected for recycling in at least five counties pursuant to section 3 of P.L.1987, c.102 (C.13:1E-99.13), but for which a feasible and beneficial method of reuse or recycling exists, as determined by the department.
"Recycle" means any process used to transform discarded products, components, or by-products into new usable or marketable materials, and which process may cause those discarded products, components, or by-products to lose their original composition or identity.
"Reuse" means the return of a product into the economic stream for use in the same kind of application originally intended for the product, without a change in the product's original composition or identity.
i. The commissioner, in cooperation with the director, shall adopt, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations necessary for the implementation of this section, which may include:
(1) a list of qualifying materials that may be collected, reused, and recycled pursuant to this section;
(2) reasonable targets to be achieved by generators for the collection, reuse, and recycling of qualifying materials, calculated by either tonnage or a percentage of the qualifying materials generated by generators;
(3) a list of acceptable collection, reuse, and recycling activities that may be undertaken pursuant to this section;
(4) a list of qualified costs that may be paid or incurred by the generator for the collection, reuse, and recycling of qualifying materials pursuant to this section;
(5) the form and manner of the application submitted to the department pursuant to paragraph (1) of subsection b. of this section;
(6) licensing or permitting requirements for organizations collecting, reusing, and recycling qualifying materials on behalf of generators pursuant to subsection d. of this section; and
(7) the creation of a logo which a generator who successfully meets the targets established by the department, and outlined in the generator's plan, may use in the promotion of that generator's products.
j. The department, the division, and the New Jersey Economic Development Authority shall post on their respective Internet websites the requirements for generators to claim the tax credit established under this section.
k. The department, in cooperation with the division and the New Jersey Economic Development Authority, shall prepare and submit a report to the Governor and, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), the Legislature on the effectiveness of the credit as an incentive for encouraging generators to collect, reuse, and recycle qualifying materials. The report shall be submitted before the fifth taxable year or privilege period in which a credit may be claimed.
3. This act shall take effect immediately.
STATEMENT
This bill would provide credits against the corporation business and gross income taxes for generators that collect, reuse, and recycle certain hard-to-recycle materials.
Specifically, under the bill, a generator that collects, reuses, and recycles qualifying materials, or that provides for such collection, reuse, and recycling, would be allowed either a corporation business or gross income tax credit equal to 20 percent of the costs paid or incurred by the generator to collect, reuse, and recycle qualifying materials pursuant to the generator's approved plan for the first privilege period or taxable year the credit is offered; 16 percent of those costs for the second privilege period or taxable year; 12 percent for the third privilege period or taxable year; 8 percent for the fourth privilege period or taxable year; and 4 percent for the fifth privilege period or taxable year. Under the bill, a "qualifying material" is any material produced, sold, or distributed by a generator for use in the State which is not collected for recycling in at least five counties, but for which a feasible and beneficial method of reuse or recycling exists, as determined by the Department of Environmental Protection (DEP). Such materials are often hard to recycle and thus this tax credit seeks to incentivize companies who produce and sell these materials to mitigate their post-consumer impacts.
In order to qualify for the tax credit, a generator, prior to undertaking any collection, reuse, and recycling activities, must submit to the DEP an application outlining: (1) the generator's plan for the collection, reuse, and recycling of qualifying materials; and (2) an estimate of costs for implementing the plan. The Commissioner of Environmental Protection would either approve or deny the application within 45 days. When filing a tax return that includes a claim for this credit, a generator must include: (1) a copy of the approved application; (2) a statement that the generator has undertaken, or provided for, the collection, reuse, and recycling activities described in the approved plan; and (3) receipts of actual costs for implementing the approved plan.
The bill establishes specific requirements for the collection, reuse, and recycling plans submitted by generators to the DEP. It also requires the DEP, in cooperation with the Director of the Division of Taxation in the Department of the Treasury, to adopt regulations necessary to implement the tax credit. These regulations may include: (1) a list of qualifying materials; (2) reasonable collection, reuse, and recycling targets to be achieved by generators; (3) a list of acceptable collection, reuse, and recycling activities that may be undertaken; (4) a list of qualified costs that may be paid or incurred by the generator; (5) the form and manner of the application submitted by generators; (6) licensing or permitting requirements for organizations collecting, reusing, and recycling qualifying materials on behalf of generators; and (7) the creation of a logo which a generator who successfully meets the targets established by the DEP, and outlined in the generator's plan, may use in the promotion of its products.
The bill would require the DEP, the division, and the New Jersey Economic Development Authority to post information regarding each of the tax credits on their respective websites. It would also require these entities to prepare and submit to the Governor and the Legislature a report on the effectiveness of each of the tax credits.
