Assembly Commerce and Economic Development Committee Statement to Senate, No. 3305 (March 8, 2021)

Summary

An Assembly Commerce and Economic Development Committee statement to the Senate on Senate Bill No. 3305 (1R), State of New Jersey, dated March 8, 2021, reporting the bill favorably with committee amendments. As amended, the bill allows corporation business tax and gross income tax credits for nonresidential and multifamily building improvements to reduce the spread of COVID-19, for expenditures made in calendar years 2020, 2021, and 2022, including bi-polar ionization, ultraviolet lighting, infrared thermometers, sneeze guards and ventilation. The credit is 75 percent of expenditures for a location under 30,000 square feet, capped at $100,000, and 50 percent for larger locations, capped at $250,000. Taxpayers must add back any deducted expenditures, and the bill is identical to Assembly Bill No. 5389.

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ASSEMBLY COMMERCE AND ECONOMIC DEVELOPMENT COMMITTEE

STATEMENT TO

[First Reprint]

SENATE, No.
3305

with
committee amendments

STATE
OF NEW JERSEY

DATED: MARCH
8, 2021

The Assembly Commerce and Economic Development
Committee reports favorably and with committee amendments Senate Bill No.
3305(1R).

This
bill, as amended, allows corporation business tax and gross income tax credits
for nonresidential and multifamily building improvement expenses to reduce the
spread of COVID-19. The credit will be allowed for expenditures made during calendar
years 2020, 2021, and 2022.

The
following expenditures will be includable in calculation of the credit:
expenditures for (1) bi-polar ionization and ultraviolet lighting to disinfect
indoor air and surfaces, including in elevators and work areas; (2) infrared
thermometers for screening visitors in common areas; (3) transparent sneeze
guards or shields; (4) touchless entryway and security; (5) ventilation; and
(6) other materials, supplies, and equipment to reduce the spread of COVID-19
and necessary to create a safe environment for building occupants.

The
amount of credit allowed will be equal to: 75 percent of the taxpayer’s
expenditures for a location of less than 30,000 square feet, but the credit for
such expenditures cannot exceed $100,000; and 50 percent of the taxpayer’s
expenditures for a location of 30,000 square feet or more, but the credit for
such expenditures cannot exceed $250,000. A taxpayer that claims a credit
pursuant to this bill will be required to add back into their calculation of
income the amount of any expenditures that the taxpayer deducted. This
requirement ensures that the taxpayer does not get the double benefit of being
allowed to deduct expenses from income and get a credit against their tax
liability to cover the cost of those expenses.

As
amended and reported by the committee, Senate Bill No. 3305 (1R) is identical
to Assembly Bill No. 5389, which also was amended and reported by the
committee.

COMMITTEE AMENDMENTS :

The committee amended the bill to allow a credit for
multifamily buildings, in addition to allowing a credit for nonresidential
buildings.

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