Sponsored by:
Senator TROY SINGLETON
District 7 (Burlington)
Senator NILSA I. CRUZ-PEREZ
District 5 (Camden and Gloucester)
Senator MICHAEL L. TESTA, JR.
District 1 (Atlantic, Cape May and Cumberland)
Co-Sponsored by:
Senators Diegnan, Oroho, O'Scanlon and Greenstein
SYNOPSIS
Allows taxpayers with fewer than 50 employees to accelerate depreciation of capital expenditures incurred to comply with COVID-19 executive orders.
CURRENT VERSION OF TEXT
As introduced.
An Act allowing taxpayers to accelerate depreciation of certain expenditures under corporation business and gross income taxes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Notwithstanding paragraph (12) of subsection (k) of section 4 of P.L.1945, c.162 (C.54:10A-4), a taxpayer with fewer than 50 employees shall be allowed the additional depreciation allowance of subsection (k) of section 168 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.168) for up to $150,000 of eligible property expenditures.
As used in this section, “eligible property expenditures” means capital expenditures incurred by the taxpayer to comply with the health and safety requirements imposed under the executive orders issued by the Governor in response to the COVID-19 pandemic.
The director of the Division of Taxation in the Department of the Treasury shall prescribe the rules and regulations necessary to carry out the provisions of this section.
2. Notwithstanding section 26 of P.L.2004, c.65 (C.54A:5-1.2), a taxpayer with fewer than 50 employees shall be allowed the additional depreciation allowance of subsection (k) of section 168 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.168) for up to $150,000 of eligible property expenditures, provided that, section 26 of P.L.2004, c.65 (C.54A:5-1.2) prohibited such additional depreciation allowance.
As used in this section, “eligible property expenditures” means capital expenditures incurred by the taxpayer to comply with the health and safety requirements imposed under the executive orders issued by the Governor in response to the COVID-19 pandemic.
The director of the Division of Taxation in the Department of the Treasury shall prescribe the rules and regulations necessary to carry out the provisions of this section.
3. This act shall take effect immediately.
STATEMENT
This bill allows taxpayers who have no more than 50 employees to use a bonus depreciation allowance of up to $150,000 for capital expenditures incurred to comply with the health and safety requirements of the Governor’s executive orders regarding the COVID-19 pandemic.
Bonus depreciation allows a business to immediately deduct a large percentage of the purchase price of certain property. New Jersey decoupled from the federal rules regarding bonus depreciation in 2002. This bill re-couples to the federal rules for small business owners on up to $150,000 of expenditures incurred to comply with the Governor’s COVID-19 executive orders.