SENATE, No. 44

 

STATE OF NEW JERSEY

 

INTRODUCED JANUARY 18, 1996

 

 

By Senators LITTELL and LaROSSA

 

 

An Act concerning the purchase, lease or rental of electronic data interchange technology and supplementing the "Corporation Business Tax Act (1945)," P.L.1945, c.162 (C.54:10A-1 et seq.), and P.L.1945, c.132 (C.54:18A-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 liability imposed by section 5 of P.L.1945, c.162 (C.54:10A-5) in an amount equal to 10% of the costs of the taxpayer during a fiscal or calendar accounting year, referred to hereinafter in this section as a "tax year," beginning on or after July 1, 1997 but before July 1, 1999, for the purchase, lease or rental by the taxpayer of electronic data interchange technology to store, retrieve and transmit health care information, or such proportion of these costs as is determined by the director to be the proportion of the use of the technology in this State, provided that:

    (1) The taxpayer is a health care provider licensed pursuant to Title 45 of the Revised Statutes, and the technology purchased, leased or rented is used or intended for use in the health care provider's professional office;

    (2) The taxpayer is a health care facility licensed pursuant to P.L.1971, c.136 (C.26:2H-1 et seq.);

    (3) The taxpayer is a health maintenance organization authorized to issue health benefits plans in this State;

    (4) The taxpayer is a self-insured entity; or

    (5) The taxpayer is an employer who provides a health benefits plan for his employees; and

    (6) The technology purchased, leased or rented is primarily used or intended for use, at a minimum, for one or more of the following applications in accordance with standards adopted by the American National Standards Institute: submission of health benefits claims, inquiries about health benefits claims, information about health benefits claims payments, health benefits plan enrollment transactions, or health benefits-related eligibility inquiries.

    As used in this section, "electronic data interchange technology" means computer equipment or software which permits the electronic transmission of a business document in a standard format.

    b. No credit shall be allowed under the "Manufacturing Equipment and Employment Investment Tax Credit Act," P.L.1993, c.171 (C.54:10A-5.16 et al.), or under P.L.1993, c.170 (C.54:10A-5.4 et seq.) for property or expenditures for which a credit is allowed, or which are includable in the calculation of a credit allowed, under this section.

    c. 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 this section and then by any other statutory credits allowed against the tax. The credit allowed under this section shall be applied in the order of the credits' tax years. The amount of the credit 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 seven accounting years following a credit's tax year.

 

    2. a. A taxpayer shall be allowed a credit against the tax liability imposed by P.L.1945, c.132 (C.54:18A-1 et seq.) in an amount equal to 10% of the costs of the taxpayer during the year, referred to hereinafter in this section as the "tax year," beginning on or after July 1, 1997 but before July 1, 1999, for the purchase, lease or rental by the taxpayer of electronic data interchange technology to store, retrieve and transmit health care information, or such proportion of these costs as is determined by the director to be the proportion of the use of the technology in this State, provided that the technology purchased, leased or rented is primarily used or intended for use, at a minimum, for one or more of the following applications in accordance with standards adopted by the American National Standards Institute: submission of health benefits claims, inquiries about health benefits claims, information about health benefits claims payments, health benefits plan enrollment transactions, or health benefits-related eligibility inquiries.

    As used in this section, "electronic data interchange technology" means computer equipment or software which permits the electronic transmission of a business document in a standard format.

    b. The tax imposed for a year pursuant to P.L.1945, c.132 shall first be reduced by the amount of any credit allowed pursuant to this section and then by any other statutory credits allowed against the tax. The credit allowed under this section shall be applied in the order of the credits' tax years. The amount of the credit applied under this section against the tax imposed pursuant to P.L.1945, c.132, for premiums collected in a calendar year shall not exceed 50% of the tax liability otherwise due. 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 seven accounting years following a credit's tax year.

 

    3. This act shall take effect immediately; and section 1 shall apply to the fiscal or calendar accounting years beginning on or after July 1, 1997, and section 2 shall apply to calendar years beginning after July 1, 1997.

 

 

STATEMENT

 

    This bill provides a 10% tax credit against the New Jersey Corporation Business Tax imposed pursuant to P.L.1945, c.162 (C.54:10A-1 et seq.), and the tax imposed on insurance companies generally pursuant to P.L.1945, c.132 (C.54:18A-1 et seq.), as appropriate, beginning on or after July 1, 1997 but before July 1, 1999, for the purchase, lease or rental of electronic data interchange technology to store, retrieve and transmit health care information.

    These tax credits are intended to provide a financial incentive for health care facilities and providers, third party payers and employers to purchase, lease or rent computer equipment and software that will permit electronic claims processing and other electronic data exchanges, which have the potential to significantly reduce health care administrative costs in this State, according to the Healthcare Information Networks and Technologies (HINT) report to the Legislature under the joint auspices of Thomas Edison State College and the New Jersey Institute of Technology. This bill is part of a legislative package designed to effectuate the recommendations included in the HINT report.

 

 

                             

 

Provides temporary tax credits for the purchase, lease or rental of electronic data interchange technology to store, retrieve and transmit health care information.