Sponsored by:
Assemblyman ALEX SAUICKIE
District 12 (Burlington, Middlesex, Monmouth and Ocean)
SYNOPSIS
Provides gross income tax credits for portion of homeowners association payments used to fund infrastructure improvements within common interest communities.
CURRENT VERSION OF TEXT
As introduced.
An Act providing a gross income tax credit for certain homeowners association payments, and supplementing 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 resident taxpayer who is a member of a homeowners association and maintains a primary residence within a common interest community shall be allowed a credit against the tax imposed pursuant to the New Jersey Gross Income Tax Act, N.J.S.54A:1-1 et seq., equal to the amount of homeowners association assessments constituting infrastructure improvements paid by the taxpayer during the taxable year. If two or more resident taxpayers qualify for a tax credit for the same primary residence, the amount of the credit allowed shall be allocated in proportion to each resident taxpayers share of homeowners association assessments paid in the taxable year.
b. When filing a return that includes a claim for the homeowners association infrastructure improvement tax credit allowed pursuant to this section, a taxpayer shall submit a copy of the certification issued to the taxpayer by their homeowners association pursuant to subsection c. of this section calculating the amount of homeowners association assessments constituting infrastructure improvements that were paid by the taxpayer during the taxable year for which the credit is claimed.
c. A homeowners association shall, upon written application by a member of the association and on such forms as may be required by the association, issue written certification to the member calculating the amount of the homeowners association assessments constituting infrastructure improvements that were paid by the member during the taxable year for which the credit is claimed. The homeowners association shall issue the certification no later than 30 days following the date of receipt of a completed application.
d. A resident taxpayer who is not subject to tax in accordance with N.J.S.54A:2-4 for a taxable year may apply for the homeowners association infrastructure improvement tax credit using an application to be made available by the director. The due date for a homeowners association infrastructure improvement tax credit shall coincide with the due date for annual gross income tax returns.
e. If the credit allowed pursuant to this section, together with any other payments, credits, deductions, and adjustments allowed by law, reduces a qualified taxpayers tax liability otherwise due under N.J.S.54A:1-1 et seq. to zero, the amount of the credit remaining shall be paid to the taxpayer as a refund of an overpayment in accordance with N.J.S.54A:9-7; provided, however, that subsection (f) of that section, concerning the allowance of interest, shall not apply.
f. A taxpayer shall be eligible for the homeowners association infrastructure improvement tax credit regardless of whether the primary residence is subject to property tax or an agreement for payments in lieu of taxes.
g. For purposes of this section:
Common interest community means:
(1) property subject to the "Condominium Act," P.L.1969, c.257 (C.46:8B-1 et seq.) or the "Horizontal Property Act," P.L.1963, c.168 (C.46:8A-1 et seq.);
(2) a housing corporation or association, commonly known as a cooperative, which entitles the holder of a share or membership interest thereof to possess and occupy for dwelling purposes a house, apartment, manufactured or mobile home or other unit of housing owned or leased by the corporation or association, or to lease or purchase a unit of housing constructed or to be constructed by the corporation or association; or
(3) real estate with respect to which a person, by virtue of his ownership of a unit, is obligated to pay for real estate taxes, insurance premiums, maintenance or improvement of other real estate described in the instrument, however denominated, which creates the common interest community. Ownership of a unit does not include holding a leasehold interest of less than 20 years in a unit, including renewal options.
Homeowners association or association means a homeowners association as defined in section 528(c)(1) of the federal Internal Revenue Code, 26 U.S.C. s.528, that is located in the State, but excluding a timeshare association
Homeowners association assessment means a regular or one-time mandatory financial assessment that is paid to a homeowners association for the taxpayers primary residence and which arises from: (1) the taxpayers mandatory and automatic membership in the homeowners association; or (2) a mandatory obligation imposed by a homeowners association on unit owners who pay regularly occurring assessments.
Homeowners association assessments constituting infrastructure improvements means 18 percent of the total homeowners association assessments paid by a taxpayer during a taxable year.
2. This act shall take
effect immediately and shall apply to taxable years beginning on or after the
January 1 next following the date of enactment.
STATEMENT
This bill would provide a refundable gross income tax credit to resident taxpayers for a portion of homeowners association assessments that are paid by taxpayers for primary residences within any common interest community, and which are used by the homeowners association to support infrastructure improvements within the community. A taxpayer would be eligible for the credit regardless of whether the primary residence is subject to property taxes or an agreement for payments in lieu of taxes (PILOT payments).
Specifically, the homeowners association infrastructure improvement tax credit would equal the amount of homeowners association assessments constituting infrastructure improvements paid by the taxpayer during the taxable year. The bill defines homeowners association assessments constituting infrastructure improvements to include 18 percent of the total homeowners association assessments paid by a taxpayer during a taxable year.
When filing a tax return that includes a claim for the credit, a taxpayer would be required to submit a copy of a certification, issued upon application by the taxpayer to their homeowners association, that calculates the amount of the homeowners association assessments constituting infrastructure improvements paid by the taxpayer during the taxable year for which the credit is claimed.