SENATE STATE GOVERNMENT COMMITTEE

STATEMENT TO

SENATE, No. 1409

STATE OF NEW JERSEY

DATED: NOVEMBER 18, 1996

      The Senate State Government Committee reports favorably Senate Bill No. 1409.

      This bill changes the format of the contributions that a taxpayer may make through the gross income tax return to resolve a problem of limited space on the tax return.

      Currently, a taxpayer filing a New Jersey gross income tax return may choose to make a contribution from any refund due, or to make a contribution in excess of a refund, to any of three State managed dedicated funds. By law, a taxpayer's choice to make a contribution must be in the form of a "check-off" on the gross income tax return. Two more check-offs for State managed dedicated funds have already been approved for addition to the return. Crowding on the return may also delay proposals for the addition of other equally worthwhile special dedicated funds which are now pending before the Legislature because the check-offs will not fit on the tax return.

      This bill amends the statutes which currently provide for check-off contributions to eliminate requirements about the form of the contribution choices, but does not affect the right of a taxpayer to make contributions to the funds. The bill replaces the check-offs on the return form with numerical designations on the return to indicate the wishes of the taxpayer. The numerical designation system is currently used by New Jersey public employers to record employee choices to make charitable contributions by payroll deduction, and a similar system could be used on the tax return and in its instruction book.

      A taxpayer would have the right to designate contributions on the gross income tax returns to the Endangered and Nongame Species of Wildlife Conservation Fund, the Children's Trust Fund, the Vietnam Veterans' Memorial Fund, the New Jersey Breast Cancer Research Fund and the Battleship New Jersey Memorial Fund. This bill will simplify the tax return to ease the administration of contributions to existing funds and to permit future expansion to contributions programs. Its provisions will be applicable to returns for taxable years beginning after the date of enactment.