ASSEMBLY, No. 1780

STATE OF NEW JERSEY

219th LEGISLATURE

PRE-FILED FOR INTRODUCTION IN THE 2020 SESSION

Sponsored by:

Assemblywoman  NANCY F. MUNOZ

District 21 (Morris, Somerset and Union)

SYNOPSIS

     Provides a corporation business tax credit for investment in certain manufacturing equipment, facility renovation, modernization, and expansion.

CURRENT VERSION OF TEXT

     Introduced Pending Technical Review by Legislative Counsel.

An Act providing a corporation business tax credit for investment in certain manufacturing equipment, facility renovation, modernization, and expansion, and supplementing 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 imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to 20 percent of the amount paid during the privilege period for:

     (1)   manufacturing equipment installed at a manufacturing facility in this State; and

     (2)   the acquisition, construction, reconstruction, installation, or erection of improvements or additions that result in the renovation, modernization, or expansion of a manufacturing facility in this State.

     An unused credit may be carried forward, if necessary, for use in

the seven privilege periods following the privilege period for which the credit is allowed.

     b.    A credit shall not be allowed under P.L.1993, c.170 (C.54:10A-5.4 et seq.), P.L.1993, c.171 (C.54:10A-5.16 et al.), P.L.1993, c.175 (C.54:10A-5.24), or P.L.2001, c.321 (C.54:10A-5.31 et seq.) for expenditures for which a credit is allowed pursuant to this section.

     c.     The order of priority of the application of the credit allowed under this section and any other credits allowed by law shall be as prescribed by the director.  The amount of the credit applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for a privilege period, together with any other credits allowed against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), shall not exceed 50 percent 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.54:10A-5).

     d.    As used in this section:

     "Manufacturing equipment" means machinery, apparatus, or equipment, including, but not limited to, any machinery, apparatus, or equipment employing an advanced technological process, used in the production of tangible personal property that is eligible for the sales tax exemption pursuant to subsection a. of section 25 of P.L.1980, c.105 (C.54:32B-8.13); and

     "Manufacturing facility" means a business location, including, but not limited to, a factory, mill, or plant, at which more than 50 percent of the business personal property that is housed in the facility is manufacturing equipment.

     2.    This act shall take effect immediately and apply to amounts paid in privilege periods beginning after the date of enactment.

STATEMENT

     This bill allows a corporation business tax credit for 20 percent of the costs of certain manufacturing equipment installed at a manufacturing facility in this State and 20 percent of the costs of improvements or additions that result in the renovation, modernization, or expansion of a manufacturing facility in this State.

     The bill provides that expenditures for certain manufacturing equipment, facility renovation, modernization, and expansion for which a credit is allowed under this bill are not to be considered expenditures for which a credit is allowed under the New Jobs Investment Tax Credit, the Manufacturing and Employment Investment Tax Credit, the Research and Development Credit, or the Effluent Treatment and Conveyance Equipment Credit.

     The bill defines "manufacturing equipment" as machinery, apparatus or equipment, including, but not limited to, any machinery, apparatus, or equipment employing an advanced technological process, used in the production of tangible personal property that is eligible for the sales tax exemption for manufacturing equipment.  The bill defines a "manufacturing facility" as a business location, including, but not limited to, a factory, mill, or plant, at which more than 50 percent of the business personal property that is housed in the facility is manufacturing equipment.