Bill Text: NJ S672 | 2018-2019 | Regular Session | Introduced
Bill Title: Provides corporation business and gross income tax credits for three tax years for employers that allow telecommuting.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2018-01-09 - Introduced in the Senate, Referred to Senate Economic Growth Committee [S672 Detail]
Download: New_Jersey-2018-S672-Introduced.html
STATE OF NEW JERSEY
218th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2018 SESSION
Sponsored by:
Senator CHRISTOPHER "KIP" BATEMAN
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
SYNOPSIS
Provides corporation business and gross income tax credits for three tax years for employers that allow telecommuting.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act providing credits against corporation business and gross income taxes for employers that allow employees to work from home 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. For privilege periods beginning on or after January 1, 2017 but before January 1, 2020, 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) for a privilege period in an amount equal to 1% of the salary and wages paid by the taxpayer during the privilege period to a qualified residential telecommuting employee residing in New Jersey during the privilege period multiplied by the percentage of the services that are part of the employee's normal workweek that are performed in the employee's residence.
b. As used in this section:
"Qualified residential telecommuting employee" means a salaried or hourly employee of the taxpayer who utilizes telecommuting and who, pursuant to a residential telecommuting work arrangement between the taxpayer and that employee entered into after the date of enactment of P.L. , c. (pending before the Legislature as this bill) regularly performs a portion of the services that are part of that employee's normal workweek in the employee's residence in this State, without making any work-related commute trips on the day or days that the employee is telecommuting and is not directly supervised in the conduct of the employee's duties while at the employee's residence. An employee of the taxpayer who was telecommuting during any part of the calendar year preceding the date of enactment of P.L. , c. (pending before the Legislature as this bill) shall not qualify as a "qualified residential telecommuting employee" for purposes of the credit provided by this section.
"Residential telecommuting work arrangement" means a written contract between the taxpayer and employee defining the responsibilities of the taxpayer and employee with respect to a job allowing residential telecommuting.
"Telecommuting" means an off-site arrangement that permits an employee to work in the employee's residence for all or part of the workweek.
c. 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 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).
Unused credit may be carried forward, if necessary, for use in the privilege period following the privilege period for which the credit is allowed.
d. A taxpayer claiming a credit under this section shall file with the director, on a form to be prescribed by the director, for each qualified residential telecommuting employee, the following information at a minimum: the start date of employment, the date the employee began working from the employee's residence, the total number of hours or days worked per workweek, the number of hours or days per workweek that the employee works from the employee's residence, total salary or wages paid during the privilege period to the employee, and any other information deemed necessary by the director to ensure that taxpayers are claiming this credit only for employees that are working from home pursuant to a residential telecommuting work arrangement entered into after the enactment of P.L. , c. (pending before the Legislature as this bill). A copy of this information required to be filed with the director shall be made available to the qualified residential telecommuting employee and may be provided as part of the statement as to tax withheld on wages requires to be furnished by an employer to an employee pursuant to subsection (c) of N.J.S.54A:8-6.
e. Within 90 days of the conclusion of the three-year period during which the credit provided by this section is available, the director shall submit a report to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19). The report shall include, but not be limited to information on the implementation of the tax credit, costs of the tax credit, employer participation, effectiveness of the credit in increasing the numbers of employees who telecommute in the State, and recommendations as to whether the tax credit should be continued.
2. a. For taxable years beginning on or after January 1, 2017 but before January 1, 2020, 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., in an amount equal to 1% of the salary and wages paid by the taxpayer during the taxable year to a qualified residential telecommuting employee residing in New Jersey during the taxable year multiplied by the percentage of the services that are part of the employee's normal workweek that are performed in the employee's residence.
b. As used in this section:
"Qualified residential telecommuting employee" means a salaried or hourly employee of the taxpayer who utilizes telecommuting and who, pursuant to a residential telecommuting work arrangement between the taxpayer and that employee entered into after the date of enactment of P.L. , c. (pending before the Legislature as this bill) regularly performs a portion of the services that are part of that employee's normal workweek in the employee's residence in this State, without making any work-related commute trips on the day or days that the employee is telecommuting and is not directly supervised in the conduct of the employee's duties while at the employee's residence. An employee of the taxpayer who was telecommuting during any part of the calendar year preceding the date of enactment of P.L. , c. (pending before the Legislature as this bill) shall not qualify as a "qualified residential telecommuting employee" for purposes of the credit provided by this section.
"Residential telecommuting work arrangement" means a written contract between the taxpayer and employee defining the responsibilities of the taxpayer and employee with respect to a job allowing residential telecommuting.
"Telecommuting" means an off-site arrangement that permits an employee to work in the employee's residence for all or part of the workweek.
c. 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. for a taxable year shall be as prescribed by the director.
The amount of the credit applied against the New Jersey gross income tax due pursuant to N.J.S.54A:1-1 et seq. shall not reduce a taxpayer's New Jersey gross income tax liability to an amount less than zero.
d. 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.
e. A taxpayer claiming a credit under this section shall file with the director, on a form to be prescribed by the director, for each qualified residential telecommuting employee, the following information at a minimum: the start date of employment, the date the employee began working from the employee's residence, the total number of hours or days worked per workweek, the number of hours or days per workweek that the employee works from the employee's residence, total salary or wages paid during the taxable year for the employee, and any other information deemed necessary by the director to ensure that taxpayers are claiming this credit only for employees that are working from home pursuant to a residential telecommuting work arrangement with the taxpayer reached after the enactment of P.L. , c. (pending before the Legislature as this bill). A copy of this information required to be filed with the director shall be made available to the qualified residential telecommuting employee and may be provided as part of the statement as to tax withheld on wages requires to be furnished by an employer to an employee pursuant to subsection (c) of N.J.S.54A:8-6.
f. Within 90 days of the conclusion of the three-year period during which the credit provided by this section is available, the director shall submit a report to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19). The report shall include, but not be limited to, information on the implementation of the tax credit, costs of the tax credit, employer participation, effectiveness of the credit in increasing the numbers of employees who telecommute in the State, and recommendations as to whether the tax credit should be continued.
3. This act shall take effect immediately and apply to privilege periods and taxable years beginning on or after January 1, 2017.
STATEMENT
This bill provides credits against the corporation business and gross income taxes for employers that allow an employee residing in the State to work from home. The credits will be allowed for privilege periods or taxable years beginning on or after January 1, 2017 but before January 1, 2020.
The amount of the credit allowed per qualified residential telecommuting employee is equal to 1% of the salary or wages paid by the taxpayer during the privilege period or taxable year to the employee, multiplied by the percentage of the services that make up the employee's normal workweek that are performed at the employee's home. An employee cannot have been telecommuting while employed by the taxpayer during the calendar year preceding enactment of this bill. The taxpayer and the employee must have a written contract, agreed to after the enactment of this bill, defining the responsibilities of the taxpayer and employee with respect to the job allowing residential telecommuting.
In order to claim a credit provided by this bill, a taxpayer must file a form, to be developed, with the Director of the Division of Taxation. The form will include information about each employee for whom a credit is claimed, including the start date of employment, the date the employee began working from home, the total number of hours or days worked per workweek, the number of hours or day per workweek that the employee worked from home, and total salary or wages paid to the employee during the taxable year or privilege period.
The credits are not refundable, however, the corporation business tax credit may be carried forward to the next privilege period if necessary.
Within 90 days of the conclusion of the three-year period during which the credits provided by this bill are available, the director is to submit a report to the Legislature that provides information on the implementation of the credits, the costs to the State, the effectiveness of the credits in increasing the numbers of individuals who telecommute in the State, and recommendations as to whether the credits should be continued.
