A681

An Act allowing a credit against the corporation business tax and the gross income tax for employing persons with a developmental disability, supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and Title 54A of the New Jersey Statutes.

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 imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) in an amount equal to 10 percent of the salary and wages paid by the taxpayer during the privilege period to an employee with a developmental disability.

For purposes of this section, “employee with a developmental disability” means an employee of the taxpayer who has a developmental disability as defined in subsection b. of section 3 of P.L.1985, c.145 (C.30:6D-25) and for who the Division of Developmental Disabilities in the Department of Human Services has declared eligible for its services.

b. The credit allowed pursuant to this section shall not exceed $3,000 for each employee with a developmental disability, and shall not exceed a total credit of $60,000 for the taxpayer’s privilege period.

c. The director shall prescribe the order of priority of the application of the credit allowed under this section and any other credits allowed by law against the tax imposed under section 5 of P.L.1945, c.162 (C.54:10A-5). The amount of the credit applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for a privilege period, together with any other credits allowed by law, 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 (C.54:10A-5). Any remaining credit shall not be carried forward to another privilege period.

d. A taxpayer shall not be allowed a credit pursuant to this section and pursuant to section 1 of P.L.2005, c.318 (C. 54:10A-5.38) for the same employee in the same privilege period.

2. a. A taxpayer shall be allowed a credit against the tax otherwise due pursuant to “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq., in an amount equal to 10 percent of the salary and wages paid by the taxpayer during the taxable year to an employee with a developmental disability.

b. The credit allowed pursuant to this section shall not exceed $3,000 per employee with a developmental disability, and shall not exceed a total credit of $60,000 for the taxpayer’s taxable year.

c. The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed pursuant to the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq. for a taxable year shall be as prescribed by the director. The amount of the credit applied under this section against the tax imposed for a taxable year, together with any other credits allowed by law, shall not reduce the tax liability to an amount less than zero. Any remaining credit shall not be carried forward to another taxable year.

d. A business entity that is classified as a partnership for federal income tax purposes shall not be allowed the credit directly, but the amount of credit of a taxpayer in respect of a distributive share of partnership income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer’s share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer’s taxable year.

A taxpayer that is a New Jersey S corporation shall not be allowed the credit directly, but the amount of credit of a taxpayer in respect of a pro rata share of S corporation income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the New Jersey S corporation that is equal to the taxpayer’s share, whether or not distributed, of the total pro-rata share of S corporation income of the New Jersey S corporation for its privilege period ending within or with the taxpayer’s taxable year.

e. A taxpayer shall not be allowed a credit pursuant to this section and pursuant to section 2 of P.L.2005, c.318 (C.54A:4-11) for the same employee in the same taxable year.

3. Notwithstanding any provision of the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the Director of the Division of Taxation is authorized to adopt immediately upon filing with the Office of Administrative Law such rules and regulations as are necessary to effectuate the provisions of this act, which shall be effective for a period not to exceed 18 months following the date of filing and may thereafter be amended, adopted, or readopted by the director in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).

4. This act shall take effect immediately and apply to taxable years and privilege periods beginning on or after January 1 next following the date of enactment.

STATEMENT

This bill allows taxpayers to claim a credit against their corporation business tax liability or gross income tax liability in the amount of 10 percent of salary and wages paid to an employee with a developmental disability. The credit is capped at $3,000 per employee, and the total credit is capped at $60,000 per taxpayer per year.

The bill defines “employee with a developmental disability” as an employee of the taxpayer who has a developmental disability as defined in N.J.S.A.30:6D-25 and for who the Division of Developmental Disabilities in the Department of Human Services has declared eligible for its services.

New Jersey already allows taxpayers to claim a credit for the employment of certain persons with disabilities at an occupational training center or sheltered workshop. This bill allows a credit for any type of employment, but taxpayers will be prohibited from claiming the credit allowed by this bill if in the same year they claim a credit for employment of the same employee at an occupational training center or sheltered workshop.