ASSEMBLY CONCURRENT RESOLUTION No. 191

STATE OF NEW JERSEY

217th LEGISLATURE

 

INTRODUCED JUNE 20, 2016

 


 

Sponsored by:

Assemblyman  ERIC HOUGHTALING

District 11 (Monmouth)

Assemblywoman  JOANN DOWNEY

District 11 (Monmouth)

 

 

 

 

SYNOPSIS

     Establishes “New Jersey Tax Structure Study Commission.”

 

CURRENT VERSION OF TEXT

     As introduced.

  


A Concurrent Resolution establishing a temporary commission to study and make recommendations to reform the State’s current tax structure.  

 

     Be It Resolved by the General Assembly of the State of New Jersey (the Senate concurring):

 

     1. There is established in the Legislative branch of State government a temporary commission to be known as the “New Jersey Tax Structure Study Commission.”

 

     2. The purpose of the commission shall be to conduct a study of the tax structure of this State and to recommend revenue-neutral policy options to modernize the current system of imposing, assessing, and collecting State and local taxes, with the goal of providing revenues at a level sufficient to the needs of the State and its local units of government while increasing the system’s simplicity, fairness, economic competitiveness, and affordability. 

     To effectuate that purpose, the commission shall examine the gross income tax, the corporation business tax, the sales and use tax, the transfer inheritance tax and the estate tax, the State’s excise taxes, including the motor fuels tax, the petroleum products gross receipts tax, the cigarette tax, the tobacco products wholesale sales and use tax, and the alcoholic beverage tax, and the local property tax, and, in examining each of those taxes, consider if the tax encourages economic growth and is efficient, stable, simple and predictable, and fair and equitable.

     In examining the gross income tax, the commission also shall evaluate: the rate structure as it relates to the tax’s progressivity and equity among single and joint filers, the purposes and efficacy of existing deductions, exclusions, and exemptions, if existing tax credits are meeting public policy goals and if other tax credits should be allowed, the administration of the tax and if it is fair and efficient, including the manner in which tax refunds are made. 

     In examining the corporation business tax, the commission also shall evaluate: the effect of the tax on the operations of corporations, the impact of the tax on the competitiveness of State corporations and on prices paid for their goods and services, the applicability of a corporate-based business tax structure when alternative forms of business organizations are increasingly being used, the use of tax credits including consideration of their efficacy in achieving policy goals, their application to business entities other than corporations, the expansion of existing tax credits or the allowance of new tax credits, and if any benefit would be achieved by use of results-based analysis of tax credits, and the advantages and disadvantages of alternative forms of corporate taxation, including combined reporting.        

     In examining the sales and use tax, the commission also shall evaluate: the impact on the State’s revenues and economy of the existing rate and exemptions, as compared to a lower rate and a broader base, the treatment of sales and use tax on business-to-business sales, the collection of tax on sales of enumerated services subject to tax, if there is equity in the existing tax structure, and the extent to which online sales by out-of-State sellers that do not have a physical presence in this State have diminished sales and use tax collections and caused harm to retail sellers that do have a physical presence in this State. 

     In examining the transfer inheritance tax and the estate tax, the commission also shall evaluate: the demographics of taxpayers typically affected by these taxes, the tax avoidance strategies employed by taxpayers to lessen the impact of these taxes, the extent to which State residents move out-of-State as a result of these taxes, and if changes to the tax rates or base or the elimination of either or both of the taxes is advisable. 

     In examining the State’s excise taxes, including the motor fuels tax, the petroleum products gross receipts tax, the cigarette tax, the tobacco products wholesale sales and use tax, and the alcoholic beverage tax, the commission also shall evaluate: the effect of the taxes on price elasticity, the effect of the taxes on consumer purchasing patterns, and if these taxes fulfill a particular public purpose. 

     In examining the local property tax, the commission also shall evaluate: the impact of the tax on businesses, the impact of the tax on residents, especially low- and moderate-income residents, the purposes and efficacy of existing tax exemptions and tax abatements, and alternative sources of revenue that may provide a means to lessen the dependence of local governments on property taxes. 

 

     3.  The commission shall be comprised of 10 members, five of whom shall be members of the Senate appointed by the President of the Senate and five of whom shall be members of the General Assembly appointed by the Speaker of the General Assembly. Not more than three members of the commission appointed by the President of the Senate shall be members of the same political party as the President. Not more than three members of the commission appointed by the Speaker of the General Assembly shall be members of the same political party as the Speaker. Vacancies in the membership of the commission shall be filled in the same manner as the original appointments are made. 

 

     4.  The commission shall organize as soon as practicable after the appointment of a majority of its members, and shall elect a chairperson from among its members.  The commission may appoint a secretary, who need not be a member of the commission, and shall be entitled to call to its assistance and avail itself of the services of the employees of the Office of Legislative Services as it may require and as may be available to it for its purposes. Members of the commission shall serve without compensation for their services in connection with the commission, but may be reimbursed for reasonable expenses incurred in the performance of their duties, within the limit of funds appropriated or otherwise made available to the commission for its purposes. 

 

     5.  The commission shall meet at the call of the chairperson and may hold hearings at the times and in the places the chairperson determines to be necessary to conduct its study and formulate its policy options. As part of its study, the commission may examine the functions, duties, operations, and programs of departments and agencies of the State and local units of governments that are relevant to the tax structure of this State, review statutes, regulations, ordinances, resolutions, opinions, orders, and agreements that govern the imposition, assessment, and collection of the current State and local tax system and provide exemptions, deductions, exclusions, and other benefits that reduce or offset a taxpayer’s liability for tax, and receive reports and testimony from independent experts, other qualified individuals, and members of the general public. In formulating its policy options, the commission may consider pending and proposed bills and resolutions that provide a means to improve or revise the current tax structure, evaluate systems of State and local tax reform that have been proposed or implemented in other states and jurisdictions, and receive reports and testimony from independent experts, other qualified individuals, and members of the general public.

 

     6.  The commission shall issue a final report to the Governor and the Legislature not later than 180 days following the date of its organizational meeting. The report shall provide a summary of the study conducted by the commission, detail each of the commission’s recommended policy options, and demonstrate, in a form and manner as shall be determined by the commission, that all State and local revenues collected under the powers of the State, as accurately as can be estimated by the commission, will be the same after the recommended policy options are fully implemented as they were before the policy options were implemented. The report also shall identify any legislative bills or resolutions that the commission recommends for adoption by the Legislature and specify if any recommendation necessitating a change to the State Constitution should be recommended to the Legislature for submission directly to the voters or should be referred to a constitutional convention to be convened for purposes of modernizing the current system of imposing, assessing, and collecting State and local taxes. The commission shall transmit the report to the Legislature, in accordance with section 2 of P.L.1991, c.164 (C.52:14-19.1), and shall make the report available to the public electronically through a link prominently displayed on the official Internet website of the Legislature.         

     

     7.  This concurrent resolution shall take effect immediately.  

 

STATEMENT

 

     This concurrent resolution establishes a temporary commission to be known as the “New Jersey Tax Structure Study Commission” in the Legislative branch of State government.

     The purpose of the commission is to conduct a study of the tax structure of this State and to recommend revenue-neutral policy options to modernize the current system of imposing, assessing, and collecting State and local taxes, with the goal of providing revenues at a level sufficient to the needs of the State and its local units of government while increasing the system’s simplicity, fairness, economic competitiveness, and affordability. To effectuate that purpose, the resolution directs the commission to examine the gross income tax, the corporation business tax, the sales and use tax, the transfer inheritance tax and the estate tax, the State’s excise taxes, and the local property tax, and, in examining each of those taxes, consider if the tax encourages economic growth and is efficient, stable, simple and predictable, and fair and equitable.

     The resolution provides for the commission to be comprised of 10 members, five of whom shall be members of the Senate appointed by the President of the Senate and five of whom shall be members of the General Assembly appointed by the Speaker of the General Assembly. Under the resolution, not more than three members of the commission appointed by the President of the Senate shall be members of the same political party as the President and not more than three members of the commission appointed by the Speaker of the General Assembly shall be members of the same political party as the Speaker.

     The resolution requires the commission to issue a final report to the Governor and the Legislature not later than 180 days following the date of its organizational meeting. The report is required to provide a summary of the study conducted by the commission, detail each of the commission’s recommended policy options, and demonstrate, in a form and manner as shall be determined by the commission, that all State and local revenues collected under the powers of the State, as accurately as can be estimated by the commission, will be the same after the recommended policy options are fully implemented as they were before the policy options were implemented.  

     The resolution takes effect immediately upon adoption by both Houses of the Legislature.