New Jersey-2024-S632-Introduced

An Act allowing tax credits for supermarkets with dedicated displays for Jersey Fresh products, 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. 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) if the taxpayer maintains a dedicated display space for Jersey Fresh products and New Jersey organic certified products in a grocery store or a small food retailer. For a display in a grocery store, the credit shall be in the amount of $2,000 in a privilege period for each dedicated display space that measures 25 square feet of floor space or more, and is maintained for 120 days or more during the privilege period. For a display in a small food retailer, the credit shall be in the amount of $1,000 in a privilege period for each dedicated display space that measures 12 square feet of floor space or more, and is maintained for 120 days or more during the privilege period.

b. The director shall prescribe the order of priority of the application of the credit allowed under this section and any other credits allowed by law against the tax imposed under section 5 of P.L.1945, c.162 (C.54:10A-5). The amount of the credit applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for a privilege period, together with any other credits allowed by law, 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.54:10A-5).

c. As used in this section:

"Grocery store" means a self-service retail establishment that occupies at least 2,500 square feet and that sells household foodstuffs for off-site consumption, including, but not limited to, fresh produce, meat, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, baked foods, or prepared foods. "Grocery store" shall not include an establishment that handles only prepackaged food that does not require time or temperature controls for food safety.

"Jersey Fresh products" means products promoted by the Jersey Fresh quality grading, marketing, and labeling program operated by the Department of Agriculture and pursuant to which fresh, locally grown fruits and vegetables are labeled as Jersey Fresh, locally grown nursery crops are labeled as Jersey Grown, locally aquacultured or wild-caught fish and shellfish are labeled as Jersey Seafood, and processed foods made with New Jersey-sourced agricultural products are labeled as Made with Jersey Fresh.

"New Jersey certified organic products" means products certified by the Department of Agriculture pursuant to P.L.2003, c.176 (C.4:10-79).

"Small food retailer" means a small retail outlet, with less than 2,500 square feet, which sells a limited selection of foods and other products, such as a bodega, convenience store, corner store, neighborhood store, small grocery, or small-scale store.

2. a. A taxpayer shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., if the taxpayer maintains a dedicated display space for Jersey Fresh products and New Jersey certified organic products in a grocery store or a small food retailer. For a display in a grocery store, the credit shall be in the amount of $2,000 in a taxable year for each dedicated display space that measures 25 square feet of floor space or more, and is maintained for 120 days or more during the taxable year. For a display in a small food retailer, the credit shall be in the amount of $1,000 in a taxable year for each dedicated display space that measures 12 square feet of floor space or more, and is maintained for 120 days or more during the taxable year.

b. The director shall prescribe the order of priority of the application of the credit allowed under this section and any other credits allowed by law against the tax otherwise due for the taxable year under N.J.S.54A:1-1 et seq. The amount of the credit applied under this section against the tax imposed under N.J.S.54A:1-1 et seq. for the taxable year, together with any other credits allowed by law, shall not reduce the tax liability to an amount less than zero.

c. A business entity that is classified as a partnership for federal income tax purposes shall not be allowed the credit directly under N.J.S.54A:1-1 et seq., but the amount of credit of the taxpayer in respect of a distributive share of partnership income 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.

A taxpayer that is a New Jersey S corporation shall not be allowed the credit directly under N.J.S.54A:1-1 et seq., 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.

d. As used in this section:

"New Jersey certified organic products" means products certified by the Department of Agriculture pursuant to P.L.2003, c.176 (C.4:10-79).

3. Notwithstanding any provision of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the Director of the Division of Taxation in the Department of the Treasury is authorized to adopt immediately upon filing with the Office of Administrative Law such rules and regulations necessary to implement this act. The rules and regulations adopted pursuant to this section shall be effective for a period not to exceed 18 months following the date of filing and may thereafter be amended, adopted, or readopted by the director in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).

4. This act shall take effect immediately and apply to privilege periods and taxable years beginning on and after the date of enactment.

STATEMENT

This bill allows a corporation business tax credit or gross income tax credit for grocery stores and small food retailers that maintain dedicated displays for Jersey Fresh products and New Jersey certified organic products. The credit would be $2,000 per display in a grocery store, or $1,000 per display in a small food retailer. To qualify for a credit, the dedicated displays must be at least 25 square feet of floor space in a grocery store or 12 square feet of floor space in a small food retailer, and must be maintained for at least 120 days of the year.

Jersey Fresh is a quality grading, marketing, and labeling program operated by the Department of Agriculture and pursuant to which fresh, locally grown fruits and vegetables are labeled as Jersey Fresh, locally grown nursery crops are labeled as Jersey Grown, locally aquacultured or wild-caught fish and shellfish are labeled as Jersey Seafood, and processed foods made with New Jersey-sourced agricultural products are labeled as Made with Jersey Fresh.

New Jersey certified organic products are verified by the Department of Agriculture, and are part of an ecological production management system that promotes and enhances biodiversity, biological cycles and soil biological activity. The system is based on minimal use of off-farm inputs and on management practices that restore, maintain, and enhance ecological harmony.

Fresh, locally-sourced foods can provide greater flavor and nutrition than those imported from far away. Often times when produce is shipped to New Jersey from other states, it must be harvested before it is at its peak of flavor and ripeness, to allow for both time and shipping conditions of that item from another state or sometimes even another country. A Jersey Fresh commodity is grown right here in New Jersey, and because of the obvious geographic proximity to local distribution centers, the commodity can be harvested at its peak stage and offered to retailers in a much shorter amount of time. Additionally, when commodities are harvested at their peak of flavor and freshness, more of the very important vitamins and minerals each commodity offers is retained within the commodity.