ASSEMBLY, No. 900

 

STATE OF NEW JERSEY

 

Introduced Pending Technical Review by Legislative Counsel

 

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

 

 

By Assemblyman ROCCO

 

 

An Act providing for income deductions under the gross income tax for certain charitable contributions made to certain institutions of higher education, and supplementing chapter 3 of Title 54A of the New Jersey Statutes.

 

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

    1. a. Each taxpayer shall be allowed to deduct from gross income the total amount of a charitable contribution of $1,000 or more, in cash or cash equivalent, made to or for the use of an institution of higher education situated in this State. The value of a contribution of property not in cash or cash equivalent shall not be allowable as a deduction under this section.

    b. The amount allowable as a deduction shall be a voluntary contribution, given without present or future expectation of any benefit of monetary value to be derived from the institution of higher education, in accord with the donative intent requirements pursuant to section 170 of the federal Internal Revenue Code of 1986, 26 U.S.C. §170.

    c. The Director of the Division of Taxation shall adopt rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), and in accord with the general guidelines on charitable donations under section 170 of the federal Internal Revenue Code of 1986, 26 U.S.C. §170, and the regulations thereunder, necessary to effectuate the provisions of this act.

 

    2. This act shall take effect immediately and shall apply to taxable years beginning on and after January 1, 1992.

 

 

STATEMENT

 

    This bill provides for a deduction from gross income for certain charitable contributions to accredited post-secondary institutions of higher education situated in the State. The deduction would be allowable for donations by cash or cash equivalent of $1,000 or more on a dollar for dollar basis. Contributions of non-cash type property would be nondeductible, in keeping with the premise that a gross income tax should be clear and simple. The federal Internal Revenue Code provisions, on the other hand, for contributions of non-cash type property to charitable organizations, are quite detailed pertaining to partial interest, future interest, determining fair market value, limits on value of property, and combined with limits of 20%, 30% and 50% of adjusted gross income would augment the current statute with complicated and intricate language provisions by cash or cash equivalent will help to not erode the clarity of the New Jersey gross income tax.

    The current economic situation has affected all costs to higher educational institutions, along with tuition costs to students and their families. This deduction would allow individuals to donate to their college or university of choice in the State to assist during a time of rising costs and economic uncertainty, in addition to being able to deduct this contribution from their gross income.

 

 

 

Provides for a deduction under the gross income tax for certain charitable contributions to certain institutions of higher education in the State.