New Jersey A 515: Provides temporary corporation business tax and gross income tax credits for insourcing business to New Jersey.

Bill Text

ASSEMBLY, No. 515

STATE OF NEW JERSEY
220th LEGISLATURE

PRE-FILED FOR INTRODUCTION IN THE 2022 SESSION

Sponsored by:
Assemblyman ROY FREIMAN
District 16 (Hunterdon, Mercer, Middlesex and Somerset)

Co-Sponsored by:
Assemblyman Karabinchak

SYNOPSIS
Provides temporary corporation business tax and gross income tax credits
for insourcing business to New Jersey.

CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.

A515 FREIMAN
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AN ACT providing temporary credits under the corporation business 1
tax and the gross income tax for insourcing business to New 2
Jersey, supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and 3
Title 54A of the New Jersey Statutes. 4
5
BE IT ENACTED by the Senate and General Assembly of the State 6
of New Jersey: 7
8
1. a. For privilege periods beginning on or after January 1, 9
2019 but before January 1, 2024, a taxpayer shall be allowed a 10
credit for the privilege period against the tax imposed pursuant to 11
section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to 35 12
percent of the taxpayer’s insourcing expenses from outside the 13
United States and 25 percent of the taxpayer’s insourcing expenses 14
from within the United States but outside this State. 15
The credit shall be allowed for the privilege period during which 16
the written plan to carry out the insourcing has been completed and 17
all insourcing expenses pursuant to the plan have been paid or 18
incurred, provided however, that no credit shall be allowed unless 19
the number of full-time employees of the taxpayer at locations in 20
this State during the privilege period for which the credit is claimed 21
exceeds the number of full-time employees of the taxpayer at 22
locations in this State during the privilege period for which the 23
insourcing expenses were first paid or incurred. 24
An unused credit may be carried forward, if necessary, for use in 25
the four privilege periods following the privilege period for which 26
the credit is allowed, provided it is used before January 1, 2025. 27
If the taxpayer reduces the number of full-time employees at 28
locations in this State in any of the five privilege periods following 29
the privilege period for which the credit is allowed, the director 30
shall issue a tax assessment for the recapture of the credit 31
previously allowed pursuant to this section and shall deny any 32
outstanding credit allowed pursuant to this section. 33
b. The order of priority of the application of the credit allowed 34
pursuant to this section and any other credits allowed by law shall 35
be as prescribed by the director. The amount of the credit applied 36
under this section against the tax imposed pursuant to section 5 of 37
P.L.1945, c.162 (C.54:10A-5) for a privilege period, together with 38
any other credits allowed by law, shall not exceed 50 percent of the 39
tax liability otherwise due and shall not reduce the tax liability to an 40
amount less than the statutory minimum provided in subsection (e) 41
of section 5 of P.L.1945, c.162 (C.54:10A-5). No amount of 42
expense claimed as a credit pursuant to this section shall be allowed 43
as an amount calculated or claimed pursuant to any other credit 44
against the tax imposed pursuant to section 5 of P.L.1945, c.162 45
(C.54:10A-5). 46

A515 FREIMAN
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c. As used in this section: 1
“Business unit” means any trade or business, any line of 2
business, and any functional unit of any trade or business or of any 3
line of business. 4
"Full-time employee" means a person employed by the taxpayer 5
for consideration for at least 35 hours a week, or who renders any 6
other standard of service generally accepted by custom or practice 7
as full-time employment, or a person who is employed by a 8
professional employer organization pursuant to an employee leasing 9
agreement between the taxpayer and the professional employer 10
organization, in accordance with P.L.2001, c.260 (C.34:8-11
67 et seq.) for at least 35 hours a week, or who renders any other 12
standard of service generally accepted by custom or practice as full-13
time employment, and whose wages are subject to withholding as 14
provided in the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 15
et seq. or an employee who is a resident of another State but whose 16
income is not subject to the "New Jersey Gross Income Tax Act," 17
N.J.S.54A:1-1 et seq., or who renders any other standard of service 18
generally accepted by custom or practice as full-time employment, 19
and whose distributive share of income, gain, loss, or deduction, or 20
whose guaranteed payments, or any combination thereof, is subject 21
to the payment of estimated taxes, as provided in the "New Jersey 22
Gross Income Tax Act," N.J.S.54A:1-1 et seq. "Full-time 23
employee" shall not include any person who works as an 24
independent contractor or on a consulting basis for the taxpayer. 25
“Insourcing expense” means the net of expenses paid or incurred 26
and amounts realize