ASSEMBLY, No. 1273

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Assemblymen COLLINS and DORIA

An Act providing incentives under the gross income tax and the corporation business tax for training in technical research and development, supplementing P.L.1945, c.162 (C.54:10A-1 et seq.), and Title 54A of the New Jersey Statutes.

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

            1. a. In addition to any other exemption allowed under N.J.S.54A:1-1 et seq., the following personal exemptions shall be allowed as a deduction from gross income:

    (1) a taxpayer who is a scientist or engineer and retires from being an engineering or science employee at 55 years of age or older and is employed to teach subjects in, or related to, the fields of science or engineering at an elementary school, a secondary school or an institution of higher education in this State, -$1,000 for each tax year in which the taxpayer teaches, not to exceed the tax year of the taxpayer's initial hiring and the two tax years immediately following thereafter.

    (2) a taxpayer who graduates an institution of higher education in this State and is thereafter employed as an engineering or science employee of a research and development laboratory associated with a manufacturing facility, - $1,000 for each tax year in which the taxpayer remains an engineering or science employee of a research and development laboratory associated with a manufacturing facility, not to exceed the tax year of the taxpayer's initial employment and the two tax years immediately following thereafter.

    (3) a taxpayer who is a scientist or engineer employed by a research and development laboratory associated with a manufacturing facility who receives, while so employed, a graduate degree in the taxpayer's field of science or engineering, - $1,000 for the tax year in which the taxpayer receives the degree and the tax year immediately following thereafter.

    b. For the purposes of this section:

    "Engineer" means an individual qualified by education, training, or experience to apply the principles of science and mathematics to matter and sources of energy to produce structures, machines, to matter and sources of energy to produce structures, machines, products, systems, or processes useful to people.

    "Engineering or science employee" means an individual who is employed to perform a function that requires education, training, or experience in one of the natural, mathematical, information or medical sciences or one or more of the disciplines of an engineer.

    "Manufacturing facility" means a company or building dedicated to the production of goods for introduction into commerce.

    "Research and development laboratory" means a company or building dedicated to exploring projects in the natural, mathematical, information or medical sciences or in the disciplines of an engineer directed at developing or improving products or technologies.

    "Scientist" means an individual qualified by education, training, or experience to research, teach or practice any of the natural, mathematical, information or medical sciences.

    2. a. A taxpayer who is an industrial sponsor of an individual who has completed the course of study in a State community college or a technical institute qualifying the individual as a research technician shall be allowed a credit, subject to the provisions of subsection b. of this section, against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to 10% of the tuition cost of the individual's course of study.

    b. The tax imposed for a fiscal or calendar accounting year pursuant to section 5 of P.L.1945, c.162, shall first be reduced by the amount of any credit allowed pursuant to section 19 of P.L.1983, c.303 (C.52:27H-78), and then by any credit allowed pursuant to section 42 of P.L.1987, c.102 (C.54:10A-5.3), prior to applying any credits allowable pursuant to this section. Credits allowable pursuant to this section shall be applied in the order of the credits' tax years. The amount of the credits applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162, for an accounting 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. The amount of tax year credit otherwise allowable under this section which cannot be applied for the tax year due to the limitations of this subsection may be carried over, if necessary, to the five accounting years following a credit's tax year.

    c. For the purposes of this section:

    "Engineer" means an individual qualified by education, training, or experience to apply the principles of science and mathematics to matter and sources of energy to produce structures, machines, products, systems, or processes useful to people.

    "Industrial sponsor" means a taxpayer that provides tuition support to, or for the benefit of, a qualified student who completes a course of study in a State community college or a technical institute qualifying the individual as a research technician.

    "Research technician" means a specialist in the art or practice of areas of science or engineering who assists scientists or engineers in performing tests or experiments.

    "Scientist" means an individual qualified by education, training, or experience to research, teach, or practice any of the natural, mathematical, information or medical sciences.

    3. This act shall take effect immediately, and section 1 shall apply to taxable years beginning after enactment and section 2 shall apply to tuition paid in fiscal or calendar accounting years beginning after enactment.

STATEMENT

    This bill provides tax incentives under the gross income tax and the corporation business tax that promote the development of a well trained scientific work force.

    The bill provides additional personal exemptions to scientists and engineers who decide to teach. Scientists and engineers who retire at 55 years of age or older and teach subjects related to their field are allowed an additional personal exemption of $1,000 for each tax year in which they teach, for up to three years.

    The bill provides additional personal exemptions to persons who accomplish a technical scientific education. Persons who graduate a State institution of higher education and are employed as engineering or science employees of a research and development laboratory associated with a manufacturing facility are allowed an additional personal exemption of $1,000 for each tax year in which the they remain so employed, for up to three years. Persons who are already scientists or engineers employed by a research and development laboratory associated with a manufacturing facility who receive an advanced degree are allowed an additional personal exemption of $1,000 for the next two years.

    The bill provides a corporation business tax credit to corporate taxpayers who sponsor individuals who complete a course of study in a State community college or a technical institute that qualify the individual as a research technician, in the amount of 10% of the tuition paid for the individual by the corporate sponsor.

Provides technical training incentives under gross income tax and corporation business tax.