[Second Reprint]

SENATE, No. 44

STATE OF NEW JERSEY

INTRODUCED JANUARY 18, 1996

By Senators LITTELL and LaROSSA

An Act ²[concerning] providing tax credits for certain costs of² the purchase, lease or rental of electronic data interchange technology ²[and] ,² supplementing ²[the "Corporation Business Tax Act (1945),"]² P.L.1945, c.162 (C.54:10A-1 et seq.), ²[and]² P.L.1945, c.132 (C.54:18A-1 et seq.) ²and Title 54A of the New Jersey Statutes².

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

    1. a. A taxpayer ²,except for a New Jersey S corporation, whose shareholders shall instead be allowed the credit provided by section 3 of P.L. , c. (C. )(now pending before the Legislature as this bill),² 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 ²[July ] January², 1, 1997 but before ²[July] January² 1, 1999, for the purchase, lease or rental by the taxpayer of electronic data interchange technology to ²be used to² 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 ²or any other health care provider reimburseable by health care benefits payers², 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; ¹or¹

    (4) ¹[The taxpayer is a self-insured entity; or

    (5) The taxpayer is an employer who provides a health benefits plan for his employees] The taxpayer is an entity which processes claims for health care benefits^{1 2}or enrollments for health care benefits plans² ; and

    ¹[(6) ] (5)¹ 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 ²Health Information Electronic Data Interchange Policy Council established pursuant to P.L. ........, c. .........., (C. ..........)(now pending before the Legislature as Senate, No. 50 or Assembly, No. 1476 of 1996), or if no standards have been adopted by the council, the² 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 ²[the] a² year, referred to hereinafter in this section as the "tax year," beginning on or after ²[July] January² 1, 1997 but before ²[July] January² 1, 1999, for the purchase, lease or rental by the taxpayer of electronic data interchange technology to ²be used to² 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 ²Health Information Electronic Data Interchange Policy Council established pursuant to P.L. ........, c. .........., (C. ..........)(now pending before the Legislature as Senate, No. 50 or Assembly, No. 1476 of 1996), or if no standards have been adopted by the council, the² 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.

    ²3. a. A taxpayer shall be allowed a credit against the tax otherwise due pursuant to N.J.S.54A:1-1 et seq. in an amount equal to 10% of the costs of the taxpayer during a taxable year beginning on or after January 1, 1997 but before January 1, 1999, for the purchase, lease or rental by the taxpayer of electronic data interchange technology to be used 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 or any other health care provider reimburseable by health care benefits payers, and the technology purchased, leased or rented is used or intended for use in the health care provider's professional office; or

    (2) The taxpayer processes claims for health care benefits or enrollments for health care benefits plans; and

    (3) 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 Health Information Electronic Data Interchange Policy Council established pursuant to P.L. ........, c. .........., (C. ..........)(now pending before the Legislature as Senate, No. 50 or Assembly, No. 1476 of 1996), or if no standards have been adopted by the council, 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. If the taxpayer is a partner in a partnership, a member of an association or a shareholder in a New Jersey S corporation, the credit shall be allocated to each partner of the partnership, member of the association or shareholder in the New Jersey S corporation in proportion to the partner's, member’s or shareholder's share of the income or gain received by the partnership, association or New Jersey S corporation for its taxable year ending within or with the partner's, member’s or shareholder's taxable year.

    c. The amount of the credit claimed for the taxable year shall not exceed 50% of the tax liability that would be otherwise due for that year.

    d. The amount of the credit shall be applied during the taxable year in which the cost is incurred against any tax liability otherwise due before other credits permitted pursuant to law are applied. If the credit reduces the taxpayer’s tax liability to zero, the remaining amount of the credit shall not be considered an overpayment of the tax.²

    ²[3. ] 4.² 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, ²[and],² section 2 shall apply to calendar years beginning after July 1, 1997 ², and section 3 shall apply to taxable years beginning on or after January 1, 1997².

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