S749

An Act providing a credit against the gross income tax and the corporation business tax for the purchase of certain qualified hybrid vehicles, and supplementing chapter 4 of Title 54A of the New Jersey Statutes and P.L.1945, c.162 (C.54:10A-1 et seq.).

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 otherwise due pursuant to N.J.S.54A:1-1 et seq. in the amount of $2,000 for each qualified hybrid vehicle purchased and registered in the State of New Jersey.

If the taxpayer is a partner in a partnership, a member of an association or a shareholder in a New Jersey S corporation, the credit shall be allocated to each partner of the partnership, member of the association or shareholder in the New Jersey S corporation in proportion to the partner's, member’s or shareholder's share of the income or gain received by the partnership, association or New Jersey S corporation for its taxable year ending within or with the partner's, member’s or shareholder's taxable year.

b. The amount of the credit shall be applied during the taxable year in which the hybrid vehicle is purchased by the taxpayer against any tax liability otherwise due after any other credits permitted pursuant to law have been applied. If the credit reduces the taxpayer's tax liability to zero, the remaining amount of the credit shall not be considered an overpayment of the tax. If the amount of the credit otherwise allowable under this section in a taxable year exceeds the tax liability for the taxable year, the amount that exceeds the tax liability may be carried over for credit against the tax liability of the taxpayer in the next two taxable years or until the full credit is used, whichever occurs first.

c. To claim the credit authorized under this section, a taxpayer shall apply to the Director of the Division of Motor Vehicles for certification of credit eligibility. The director shall certify to the Division of Taxation that the vehicle meets the definition of qualified hybrid vehicle and that the vehicle is properly registered in the State. The taxpayer shall attach the certification to the tax return on which the credit is claimed.

d. The director, in consultation with the Commissioner of Environmental Protection, shall adopt, pursuant to the "Administrative Procedure Act,"P.L.1968, c.410 (C.52:14B-1 et seq.), such rules and regulations as may be deemed necessary to administer the provisions of this section.

e. As used in this section, "qualified hybrid vehicle" means a motor vehicle, but not an electric vehicle, which draws propulsion energy from both an internal combustion engine and an energy storage device, and employs a regenerative braking system to recover waste energy to charge the energy storage device that is providing propulsion energy.

2. 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), in the amount of $2,000 for each qualified hybrid vehicle purchased and registered in the State of New Jersey, up to a total of ten such vehicles, during each of the three privilege periods beginning on or after January 1 next following enactment of P.L. , c. (C. ) (pending in the Legislature as this bill).

b. The priority for the application of credit allowed pursuant to this section against the tax imposed for a privilege period pursuant to section 5 of P.L.1945, c.162, in relation to the application of any other credit allowed against the tax shall be prescribed by the Director of the Division of Taxation in the Department of the Treasury. Credits allowable pursuant to this section shall be applied in the order of the credits' privilege periods. The amount of the credits applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162, for a tax year shall not exceed 50% of the tax liability otherwise due and 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. Except as provided in subsection d. of this section, the amount of tax year credit otherwise allowable under this section which cannot be applied for the tax year due to the limitations of subsection b. of this section may be carried over, if necessary, to the five privilege periods following a credit's privilege period.

d. A taxpayer may not carry over any amount of credit or credits allowed under subsection a. of this section to a privilege period during which a corporate acquisition with respect to which the taxpayer was a target corporation occurred or during which the taxpayer was a party to a merger or a consolidation, or to any subsequent privilege period, if the credit was allowed for a privilege period prior to the year of acquisition, merger or consolidation, except that if in the case of a corporate merger or corporate consolidation the taxpayer can demonstrate, through the submission of a copy of the plan of merger or consolidation and such other evidence as may be required by the director, the identity of the constituent corporation which was the acquiring person, a credit allowed to the acquiring person may be carried over by the taxpayer. As used in this subsection, "acquiring person" means the constituent corporation the stockholders of which own the largest proportion of the total voting power in the surviving or consolidated corporation after the merger or consolidation.

3. This act shall take effect immediately and section 1 shall apply to taxable years beginning on or after January 1 next following the date of enactment of this act, and section 2 shall apply to fiscal or calendar accounting years beginning on or after July 1 next following the date of enactment of this act.

STATEMENT

This bill establishes a credit under both the gross income tax and the corporation business tax (CBT) in the amount of $2,000 per vehicle for the purchase of a qualified hybrid vehicle registered in the State. The bill provides that the credit under the CBT is allowed for the purchase of ten such vehicles during each of the three privilege periods beginning on or after January 1 next following enactment.

The bill defines a "qualified hybrid vehicle" as a motor vehicle, but not an electric vehicle, which draws propulsion energy from both an internal combustion engine and an energy storage device, and employs a regenerative braking system to recover waste energy to charge the energy storage device that is providing propulsion energy.