Modification to the New Jersey Economic Stimulus Act of 2009
The act modifies provisions of the "New Jersey Economic Stimulus Act of 2009," P.L.2009, c.90 which was signed into law on May 5. 2010. This act shall takes effect immediately and section 1 and sections 3 through 9 are retroactive to July 28, 2009 (the date of enactment of P.L.2009, c.90) , and section 2applies to applications submitted for the 2010 Technology Business Tax Certificate Transfer Program.
The act revises the definition of "biotechnology company" to clarify that only a company sufficiently involved in biotechnology may participate in the program. Eligible companies must have fewer than 225 employees in the United States as of June 30 and as of the date of the exchange of the tax benefit certificate. Additional employee thresholds must also be met.
The act added to the definition of “qualifying economic redevelopment and growth grant incentive area" in section 3 of P.L. 2009, c. 90 (C. 52:27D-489c – the original stimulus law). It means Planning Area 1 (Metropolitan), Planning Area 2 (Suburban), or a center as designated by the State Planning Commission; a pinelands regional growth area , a pinelands town management area, a pinelands village, or a military and federal installation area established pursuant to the pinelands comprehensive management plan adopted pursuant to P.L.1979, c.111 (C.13:18A-1 et seq.); a transit village, as determined by the Commissioner of Transportation; and federally owned land approved for closure under a federal Base Realignment Closing Commission action. a pinelands regional growth area established pursuant to the pinelands comprehensive management plan adopted pursuant to P.L.1979, c.111 (C.13:18A-1 et seq.).
This act also provides that are authorized to be adopted pursuant to the "New Jersey Economic Stimulus Act of 2009" (which would include those required under the ERGG provisions) will not be subject to delays from public referendum challenges in those municipalities in which general initiative and referendum is authorized. The statutes contain other provisions to ensure that certain types of ordinances are not subject to public changes through initiative and referendum and ordinances adopted for the purpose of providing economic stimulus require swift implementation and should not be impeded through the referendum process.
Proof of Business Registration Changes and Bid Language Requirements
P.L.2009, c. 315 signed into law on January 18, 2010 and effective immediately, requires the Department of the Treasury to provide each contracting agency with appropriate language reflecting the obligations of contractors and subcontractors to be included in any contract document, bid specification, request for proposal, or other documents notifying potential contractors of contract opportunities with a contracting agency.
This law revises the bidder’s requirement to provide proof of business registration to a local contracting agency prior to the awarding of a contract, purchase order or other contracting document. At the sole option of the contracting agency, the bidder may provide proof of business registration by presenting sufficient information for the contracting agency to verify proof of the bidder’s registration of the contractor, or that of listed subcontractors, through a computerized system maintained by the State.
Farmland Assessment Act provides preferential treatment for biomass, solar, or wind energy generation facilities
P.L.2009, Chapter 213 signed into law on January 16, 2010 and effective immediately immediately, however the provisions governing application for consideration for farmland assessment treatment are effective for tax years commencing after the date of enactment.
The act supplements P.L.1964, c.48 C.54:4-23.1 et seq.), the Farmland Assessment Act. This law requires that any person who owns preserved farmland may construct, install, and operate biomass, solar, or wind energy generation facilities, structures, and equipment on the farm, … “for the purpose of generating power or heat, and may make improvements to any agricultural, horticultural, residential, or other building or structure on the land for that purpose.”
These uses will now qualify for the preferential tax treatment provided under the Farmland Assessment Act.
Labor May Use GIT Laws to Suspend or Revoke Licenses of Employers
P.L. 2009, Chapter 194 was signed into on January 14, 2010 and takes effect on the 180th day after the date of enactment.
This law significantly expands the powers of the Commissioner of Labor and Workforce Development, allowing the suspension or revocation of certain licenses held by employers for failure to adhere to State wage, benefit and tax laws, including violations of the New Jersey Gross Income Tax Act (N.J.S.54A:1-1 et seq.). The act defines “license” to mean any agency permit, certificate, approval, registration, charter or similar form of authorization that is required by law and that is issued by any agency for the purposes of operating a business in this State.
In addition, the new law provides that the commissioner may suspend or revoke the licenses of clients of employee leasing companies.
State Tax Expenditure Report
P.L. 2009, Chapter 189, which was signed into law on January 13, 2010, requires that the Governor's annual budget message include a State tax expenditure report.
State tax “expenditure” means those revenue losses attributable to provisions of State tax law which establish special tax treatment, including but not limited to tax law definition, deduction, exclusion, exemption, deferral, credit, preferential tax rate or other special tax provision resulting in a reduced tax liability for certain persons, individuals, types of income, transactions or property from the liability which would be presumed to exist without the State tax expenditure.
The Division of Taxation is required to advise and assist the Governor in the preparation of the State tax expenditure report.
New Jersey Lung Cancer Research Fund
P.L. 2009, Chapter 172 which was signed into law on January 11, 2010, establishes the “New Jersey Lung Cancer Research Fund” and allows voluntary contributions to the fund by taxpayers on State gross income tax returns. Monies in the fund will be appropriated annually to the State Commission on Cancer Research.
This charitable check-off will be available to taxpayers wishing to donate to the fund for tax years 2011 and thereafter.
Natural Gas and Utility Service Used For Co-Generation
P.L.2009, c. 240, signed into law on January 16, 2010 and effective immediately, clarifies the meaning of "contiguous property" for the purposes of section 26 of the Sales and Use Tax Act, P.L. 1997, c. 162 (C. 54:32B-8.46). This new law removes certain limitations on the exemption from the tax imposed under the Sales and Use Tax Act for natural gas and utility service used for co-generation.
Reassessment of Certain Real Property by Assessor and Appeal of Assessment by Certain Property Taxpayers
P.L. 2009, Chapter 251 which was signed into law on January 16, 2010 and effective immediately, eliminates parts of the notice and approval requirements that a tax assessor must satisfy. The bill also increases the statutory threshold for bringing a property tax appeal directly to Tax Court from an assessed value of $750,000 to an assessed value of at least $1,000,000. The act would also modify the reporting requirements and criteria the assessor must provide to the Division of Taxation and eliminates the 45 day timeframe by which the county board of taxation or the Division of Taxation must approve the compliance plan.
Forest Stewardship Plan
P.L. 2009, Chapter 256 was signed into law on January 17, 2010. This act directs the Department of Environmental Protection (DEP) to establish a forest stewardship program for owners of forest land. The act further directs the DEP to establish a forest certification program and a cost share incentive program, to be known as the New Jersey Forest Stewardship Incentive Program.
The act limits local government’s ability to enact any ordinance, rule, or resolution as appropriate that conflicts with prevents or impedes the implementation of a forest stewardship plan. Also, the “Farmland Assessment Act of 1964” is now expanded to provide differential property tax assessment to owners of forest land who implement an approved forest stewardship plan.
Gloucester County Property Assessment Pilot Program
P.L.2009, c. 118, signed into law on October 1, 2009 and effective immediately, establishes a pilot program in Gloucester County for the transfer of the municipal property assessment function to a county assessor. This act requires the appointment of a county assessor over a three-year period. In addition, transfer of the assessment function requires the revaluation of all municipalities within the county to ensure uniformity of assessment throughout the county-wide assessment district.
The act requires the “Local Unit Alignment, Reorganization, and Consolidation Commission” to study this pilot program and, in consultation with the Director of the Division of Taxation, issue a report no later than February 1 of the sixth year of the pilot program.
Hiring preference criteria are provided with regard to deputy assessor positions from the ranks of currently serving municipal tax assessors or deputy tax assessors.
All current or pending assessment and abatement programs and agreements under the “Long Term Tax Exemption Law” P.L.1991, c.431 (N.J.S.A. 40A:20-1 et seq.), and the “Five-Year Exemption and Abatement Law”, P.L.1991, c.441 (N.J.S.A. 40A:21-1 et seq.), remain in effect in the pilot county.
Expansion of Neighborhood Revitalization State Tax Credit
P.L.2009, c.120 signed into law on August 18, 2009 and effective immediately, extends the Neighborhood Revitalization State Tax Credit program eligibility to areas that are adjacent to current qualifying neighborhoods and that share similar socioeconomics characteristics with those eligible neighborhoods. The eligible neighborhoods qualified due to receipt of aid under the “Special Municipal Aid Act” or because they were coextensive with an Abbot district as designated pursuant to the Comprehensive Educational Improvement and Financing Act of 1996. This act permits tax credits to businesses located in a depressed neighborhood bordering a municipality that is currently eligible to participate in the program. The cap of $10 million remains the same.
The New Jersey Economic Stimulus Act of 2009
P.L.2009, c. 90, signed into law on July 28, 2009 became effective immediately with the exception of sections 9 and 11 which became effective on October 1, 2009. This was an omnibus bill to reinvigorate New Jersey’s economy, consisting of eight actions; six of them are specific to the Division of Taxation. There are numerous technical and administrative changes in this Act. For details, the reader should read the law in its entirety. The act addresses the following:
New Jersey Economic Stimulus Act of 2009 - Full Description
Check-off- Gross Income Tax Voluntary Contributions
- An Economic Redevelopment and Growth Grant Program;
- Authorization for certain municipalities to impose special taxes and surcharges to fund redevelopment activities and certain programs;
- Modifications to the current Emerging and Biotechnology credit transfer program;
- Expansion of eligibility and tax credit limits under the “Urban Transit Hub Tax Credit Act” (UTHTCA);
- Relief to certain developers otherwise subject to the “Statewide Non-Residential Fee Act”/ Grants to municipalities for affordable housing;
- Sales tax exemption on the receipts for the use of energy by certain postconsumer material manufacturing facilities.
P.L.2009, c.124 establishes the "Community Food Pantry Fund" and the "Cat and Dog Spay / Neuter Fund". It gives New Jersey residents the opportunity to make voluntary contributions on their tax returns in support of community food pantries and for pet neutering.
Increase in Insurance Premiums Receipts Tax Rates for 2009
P.L. 2009, c. 75 signed into law on June 29, 2009 and effective immediately, increases the tax rate on group accident and health insurance premiums payable in 2009 from 1% to 1.35%. The law also modifies the current tax exemption given to a dental service corporation to make it subject to the 1.35% insurance premiums tax for taxes payable in 2009. The legislation also increases the premium receipts tax for surplus lines coverage from 3% to 5%.
New Jersey Decouples from Federal Deferral of Certain Discharge of Indebtedness Income
and Extends the Business Surtax
P.L. 2009, c.72 enacted on June 29, 2009 and effective July 1, 2009 extends the 4% surtax on corporation business tax liability for one year. The annual surtax, which was initially imposed under P.L. 2006, c.38 (N.J.S.A. 54:10A-5.40) for privilege periods ending on or after July 1, 2006 but before July 1, 2009, has been extended for one year. The surtax will now apply for privilege periods ending on or after July 1, 2006 but before July 1, 2010. As previously imposed, the surtax is paid in addition to the franchise tax that is required pursuant to N.J.S.A 54:10A-5.
The law also decouples corporation business tax from federal Internal Revenue Code deferral of certain discharge of indebtedness income.
Alcoholic Beverage Tax Increase
P.L. 2009, c. 71, signed into law on June 29, 2009 and effective August, 1, 2009 increases the New Jersey Alcoholic Beverage Tax (Excise Tax), which is applied to the first sale or delivery of alcoholic beverages to retailers in New Jersey and is paid by manufacturers, wholesalers and State beverage distributors.
The rate as it applies to liquors increases from a rate of $4.40 a gallon to a rate of $5.50 a gallon; still wines, vermouth and sparkling wines increases from a rate of $0.70 a gallon to a rate of $0.875 a gallon; apple cider (cider containing at least 3 2/10% of alcohol by volume but not more than 7% of alcohol by volume) increases from a rate of $.12 a gallon to a rate of $0.15 a gallon.
Cigarette Tax Increase
P.L. 2009, c. 70 signed into law on June 29, 2009 and effective July 1, 2009, increases the New Jersey Cigarette Tax and applies to all New Jersey cigarette stamps, stamped floor stock and to all cigarettes in the possession of any distributor, wholesaler or retailer licensed by the State of New Jersey as of July 1, 2009. The law provide for new rates per pack of: $2.70 on a pack of 20 cigarettes; $3.375 on a pack of 25 cigarettes.
Gross Income Tax Rate Increase, Property Tax Deduction Suspension and Cap Beginning, New Jersey Lottery Winnings Taxable
P.L. 2009, c. 69, approved on June 29, 2009 and was effective July 1, 2009, applies to the 2009 taxable year. The legislation temporarily adjusts the New Jersey gross income tax rates for taxpayers with taxable incomes exceeding $400,000 in taxable years beginning on or after January 1, 2009 but before January 1, 2010. The law provides for adjusted income taxation of the following brackets at the following rates: over $400,000 but not over $500,000 is adjusted from 6.37% to 8%; over $500,000 but not over $1,000,000 is adjusted from 8.97% to 10.25%; and over $1,000,000 is adjusted from 8.97% to 10.75%.
The law also provides that for taxable years beginning in 2009, taxpayers who have a gross income of more than $250,000 and are not: (1) 65 years of age or older; or (2) allowed a personal exemption as a blind or disabled individual, are not eligible for the property tax deduction.
Additionally, the maximum property tax deduction is capped at $5,000 for taxpayers who have gross income of more than $150,000, but not exceeding $250,000, and are not: (1) 65 years of age or older; or (2) allowed a personal exemption as a blind or disabled individual.
The law also provides that New Jersey Lottery winnings from prizes exceeding $10,000 are taxable for New Jersey Gross Income Tax purposes and that the New Jersey State Lottery is required to withhold income tax on such taxable winnings at the rate of 3%.
New Jersey Establishes a State Tax Amnesty Period
P.L. 2009, c. 21, signed into law on March 17, 2009 and effective immediately, establishes a 45-day State tax amnesty period, to end no later then June 15, 2009. During the amnesty period established by the Director, a taxpayer who has failed to pay any State tax, may on or before the last day of the amnesty period pay the amount of the tax owed and one-half of the balance of interest that is due as of May 1, 2009 without the recovery fee and without the imposition of any civil or criminal penalties arising out of the tax obligation.
Tax amnesty is not available to any taxpayer who at the time of payment is under criminal investigation or charge for any State tax matter, as certified by a county prosecutor or the Attorney General to the Director.
The law also imposes a 5% penalty upon any State tax liability eligible but not satisfied during the amnesty period.
Learn more about the Tax Amnesty Program, which has been scheduled to begin on May 4, 2009, and end on June 15, 2009.
Property Tax Exemption for Certain Sports and Entertainment Projects
P.L.2009, c. 6, enacted on January 27, 2009 and effective immediately, provides that a sports and entertainment project constructed under a redevelopment plan adopted by an eligible city that is owned, used and operated by the eligible city to provide sports and entertainment events, shows, public meeting or events, exhibitions or other expositions shall be deemed to be devoted to an essential public and governmental use and purpose. The property of the sports and entertainment project is exempt from property taxation as well as any special assessments of the State or any local government entity.