Assembly Commerce and Economic Development Committee Statement to Assembly, No. 5218, Dated March 8, 2021

Summary

Statement of the Assembly Commerce and Economic Development Committee of the State of New Jersey, dated March 8, 2021, reporting Assembly Bill 5218 favorably with committee amendments. The bill lets owners of small restaurants and alcoholic beverage manufacturers use a bonus depreciation allowance of up to $150,000 for capital expenditures in New Jersey to comply with the Governor's executive orders on the COVID-19 pandemic, such as heaters and overhangs. A restaurant qualifies if it has no more than 100 employees and is not a chain restaurant. New Jersey decoupled from the federal bonus depreciation rules in 2002, and the bill re-couples to them for these owners.

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ASSEMBLY COMMERCE AND ECONOMIC DEVELOPMENT COMMITTEE

STATEMENT TO

ASSEMBLY,
No. 5218

with
committee amendments

STATE
OF NEW JERSEY

DATED: MARCH 8,
2021

The Assembly Commerce and Economic Development
Committee reports favorably and with committee amendments Assembly Bill No.
5218.

This
bill, as amended, would allow the owner of a small restaurant or of an
alcoholic beverage manufacturer to use a bonus depreciation allowance of up to
$150,000 for capital expenditures incurred within New Jersey to comply with the
health and safety requirements of the Governor’s executive orders regarding the
COVID-19 pandemic. These capital expenditures would include but are not
limited to the purchase of heaters and overhangs. This benefit would be
available to a restaurant owner if the restaurant has no more than 100
employees, and if the restaurant is not a chain restaurant.

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 restaurant owners on up to $150,000 of
expenditures incurred to comply with the Governor’s COVID-19 executive orders.

COMMITTEE AMENDMENTS:

Amendments to the bill extend eligibility for the
additional depreciation allowance to owners of alcoholic beverage
manufacturers.

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