SENATE, No. 1683

 

STATE OF NEW JERSEY

 

INTRODUCED NOVEMBER 7, 1996

 

 

By Senators CAFIERO, GORMLEY, DiFrancesco, O'Connor, Lynch and Adler

 

 

An Act concerning the imposition of certain taxes on retail receipts for the funding of the projects of certain tourism improvement and development authorities, amending P.L.1992, c.65 and supplementing P.L.1966, c.30.

 

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

 

    1. Section 4 of P.L.1992, c.165 (C.40:54D-4) is amended to read as follows:

    4. a. Two or more contiguous municipalities located in a county of the sixth class may, by ordinances of a substantially similar nature, create a tourism improvement and development district for the purpose of increasing public revenue and to levy taxes upon predominantly tourism related retail receipts at a rate not to exceed [2 percent] five percent, until certification by the director pursuant to subsection e. of section 9 of P.L.1992, c.165 (C.40:54D-1), and thereafter at a rate not to exceed 4 percent, and to devote the proceeds therefrom for the purposes herein described. For the same purposes, the ordinances establishing the district shall also provide for the imposition of tourism development fees authorized pursuant to section 15 of this act, P.L.1992, c.165 (C.40:54D-15). The taxes on predominantly tourism related retail receipts and tourism development fees so imposed shall be uniform throughout the district.

    b. Notwithstanding any other law to the contrary, ordinances so adopted shall not be subject to referenda, and shall not be altered or repealed, except by mutual action of all such municipalities. Each municipality which enters into the creation of the district shall covenant that the ordinance shall not be altered or repealed in such manner as to affect any bonds or other obligations pertaining to projects within the district which are outstanding.

    c. The district shall comprise all territory within the boundaries of the municipalities which create or enter into the district.

    d. A contiguous municipality located in a county of the sixth class may, by such an ordinance, and with the mutual consent of the governing bodies of the municipalities which created the district, enter into the district so created after the date of the district's creation.

    e. A copy of an ordinance adopted pursuant to this section shall be transmitted upon adoption or amendment to the State Treasurer. An ordinance so adopted or any amendment thereto shall provide that the retail receipts tax provisions of the ordinance or any amendment to the retail receipts tax provisions shall take effect on the first day of the first full month occurring 90 days after the date of transmittal to the State Treasurer.

(cf: P.L.1992, c.165, s.4)

 

    2. Section 9 of P.L.1992, c.165 (C. 40:54D-9) is amended to read as follows:

    9. a. A vendor required to collect the tax upon predominantly tourism related retail receipts imposed pursuant to this act shall on or before the dates required pursuant to section 17 of P.L.1966, c.30 (C.54:32B-17), forward to the director the tax collected in the preceding month and make and file a return for the preceding month with the director on any form and containing any information as the Director of the Division of Taxation in the Department of the Treasury shall prescribe by rule or regulation as necessary to determine liability for the tax in the preceding month during which the person was required to collect the tax.

    b. The director may permit or require returns to be made covering other periods and upon any dates as the director may specify. In addition, the director may require payments of tax liability at any intervals and based upon any classifications as the director may designate. In prescribing any other periods to be covered by the return or intervals or classifications for payment of tax liability, the director may take into account the dollar volume of tax involved as well as the need for ensuring the prompt and orderly collection of the tax imposed.

    c. The director may require amended returns to be filed within 20 days after notice and to contain the information specified in the notice.            d. The director shall inform the authority for each month in which this tax is collected and returns made of the amount so collected in each month.

    e. From the date that substantially similar amendments to municipal ordinances to increase the tax rate pursuant to P.L. , c. (C. ) (now pending before the Legislature as this bill), take effect in all municipalities in the district, the director shall maintain a running total of the amounts collected under the tax until such month as 20 percent of the amount collected under the increased tax rate equals the total amount collected under the tax during the time the tax was levied at a 2 percent rate pursuant to P.L.1992, c.165 (C.40:54D-1 et seq.). The director shall, within 10 days of the receipt of that amount of tax collected, certify to the governing body of each municipality in the district that such amount has been collected.

(cf: P.L.1992, c.165, s.9)

 

    3. (New section) Receipts from sales of tangible personal property and services subject to a tax on predominantly tourism related retail receipts authorized by municipal ordinances which were adopted pursuant to P.L.1992, c.165 (C.40:54D-1 et seq.) are exempt from the tax rate imposed under the “Sales and Use Tax Act” to the extent that the tax rate imposed by the ordinances exceeds 2%.

 

    4. This act shall take effect immediately.

 

 

STATEMENT

 

    This bill increases the local share of the State and local taxes on tourism related receipts levied in municipalities that have formed a tourism improvement and development district. The local share of the taxes is a funding source for the advertising, promotion, improvement and support of tourism projects and for the issuance of bonds for the acquisition, construction, maintenance and operation of a convention center or tourism project and the payment of interest and principal on those bonds.

    Currently, certain contiguous municipalities may form a tourism improvement and development authority. In these municipalities an 8% tax is levied on certain tourism related retail receipts collected in a tourism improvement and development district. The tax is levied on hotel rentals, restaurant food and drink sales, and admissions charges in the district. The tax is shared by the State and the tourism authority, 6% going to the State and 2% going to the tourism authority. Currently, this tax is only levied in support of the projects of the Greater Wildwood Tourism Development Authority.

    This bill makes the 8% tax a more cooperative revenue sharing effort between the State and the tourism improvement and development district by sharing the tax revenues more equally. While the total rate of tax will remain at 8%, the local share of the levy supporting tourism projects will increase, going from 6% State and 2% authority to 4% State and 4% authority.

    This bill also provides an interim division of the 8% tax. For a period, the funds will be divided 3% to the State and 5% to the authority. This period will last until the 1% “extra” share to the authority yields funds to the authority equal to the additional amount that the authority would have received if the authority had received 4% of the funds for the entire period it was receiving 2% of the funds.

 

                             

 

Increases local share of State and local taxes on tourism related retail receipts in certain tourism improvement and development districts.