ASSEMBLY, No. 1862

 

STATE OF NEW JERSEY

 

INTRODUCED MAY 2, 1996

 

 

By Assemblywoman VANDERVALK

 

 

An Act concerning deductions or additions to the apportionment to certain municipalities of public utility gross receipts and franchise taxes due to errors or omissions in prior years, amending P.L.1940, c.5.

 

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

 

    1. Section 17 of P.L.1940, c.5 (C.54:30A-65) is amended to read as follows:

    17. a. The [State Tax Commissioner] director in making the apportionment of any taxes imposed by [this act] subsections (a) and (b) of section 6 of P.L.1940, c.5 (C.54:30A-54) and subsection a. of section 10 of P.L.1991, c.184 (C.54:30A-54.6) on any taxpayer for any year shall deduct from or add to such apportionment for such year the municipality's proper share of any deduction or addition to the extent and in the manner which may heretofore have been or may hereafter be ordered or decreed by any judgment of the State Board of Tax Appeals or any court by reason of any error or omission in connection with information provided pursuant to section 7 of P.L.1940, c.5 (C.54:30A-55), the apportionment valuation or the apportionment of the excise taxes imposed upon such taxpayer in any prior year.

    b. The director in making the apportionment of any taxes imposed by subsections (a) and (b) of section 6 of P.L.1940, c.5 (C.54:30A-54) and subsection a. section 10 of P.L.1991, c.184 (C.54:30A-54.6) on any taxpayer for any year shall deduct from or add to such apportionment for such year the municipality's proper share of any deduction or addition to the extent and in the manner which may be required, as determined by the director, by reason of any error or omission in connection with information provided pursuant to section 7 of P.L.1940, c.5 (C.54:30A-55), the apportionment valuation or the apportionment of the excise taxes imposed upon such taxpayer in any prior year, provided that the deduction or addition made pursuant to this subsection shall be taken in ten equal annual installments over a period of ten consecutive years if the amount of the addition or deduction is equal to or in excess of 45% of the total apportioned taxes received by the municipality in the year immediately prior to the year in which the addition or deduction is taken or begun.

(cf: P.L. 1940, c. 5, s. 17).

 

    2. This act shall take effect immediately and shall apply to deductions or additions made on or after January 1, 1996.

 

 

STATEMENT

 

    This bill provides that if Director of the Division of Taxation makes a deduction from or addition to an apportionment to certain municipalities of the public utility gross receipts and franchise taxes due to an error or omission concerning information provided to the director, the adjustment must be made in ten equal installments over ten consecutive years if the amount of the addition or deduction is equal to or in excess of 45% of the apportioned taxes received by the municipality in the year immediately prior to the year in which the addition or deduction is taken.

    The primary purpose of this bill is to avoid the imposition of a significant financial hardship upon any municipality that will suffer a loss in public utility gross receipts and franchise taxes due to erroneous overpayments in prior years. Such municipalities may have no option but to resort to drastic increases in property taxes to make up the unexpected loss in revenues. This bill provides a fair procedure for the correction of errors or omissions in the apportionment of public utility taxes.

 

 

                             

 

Requires ten-year phase-in of deductions or additions to apportionment to certain municipalities of public utility gross receipts and franchise taxes due to errors or omissions in prior years.