Sponsored by:
Senator MICHAEL L. TESTA, JR.
District 1 (Atlantic, Cape May and Cumberland)
SYNOPSIS
"Grown Here, Eaten Here Act; provides CBT and GIT tax credits to qualifying food establishments for costs of purchasing certain local ingredients.
CURRENT VERSION OF TEXT
As introduced.
An Act providing corporation business tax and the gross income tax credits for certain costs incurred by food establishments, designated as the Grown Here, Eaten Here Act, and 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. As used in this section:
Eligible ingredients means any fruits, vegetables, crops, or other ingredients that were grown or manufactured in this State.
Qualifying food establishment means a restaurant, a food manufacturing establishment, or a limited brewery license or restricted brewery licensed pursuant to R.S.33:1-10.
b. A taxpayer that owns and operates a qualifying food establishment in this State shall be allowed a credit against the corporation business 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 costs incurred by the taxpayer during the privilege period for the purchase of any eligible ingredients used in the preparation of foods or beverages at the qualifying food establishment.
c. The order of priority of the application of the credits allowed pursuant to this section and any other credits allowed by law shall be as prescribed by the director. The amount of the credits applied under this section against the corporation business tax liability of the taxpayer for a privilege period, together with any other credits allowed by law, shall not exceed 50 percent of the tax liability otherwise due and 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). The amount of the credit allowable under this section which cannot be used to reduce the taxpayers corporation business tax liability for the privilege period due to the limitations of this section may be carried forward and applied to the earliest available use within the 20 privilege periods immediately following the privilege period for which the credits are allowed.
2. a. As used in this section:
Eligible ingredients means any fruits, vegetables, crops, or other ingredients that were grown or manufactured in this State.
Qualifying food establishment means a restaurant, a food manufacturing establishment, or a limited brewery license or restricted brewery licensed pursuant to R.S.33:1-10.
b. A taxpayer that owns and operates a qualifying food establishment in this State shall be allowed a credit against the tax otherwise due under the New Jersey Gross Income Tax Act, N.J.S.54A:1-1 et seq., in an amount equal to 10 percent of the costs incurred by the taxpayer during the taxable year for the purchase of any eligible ingredients used in the preparation of foods or beverages at the qualifying food establishment.
b. The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed by law shall be as prescribed by the director. The amount of the credits applied under this section against the gross income tax liability of the taxpayer for a taxable year, together with any other credits allowed by law, shall not exceed 50 percent of the tax liability otherwise due. The amount of the credits allowable under this section which cannot be used to reduce the taxpayers gross income tax liability for the taxable year due to the limitations of this section may be carried forward and applied to the earliest available use within the 20 taxable years immediately following the taxable year for which the credits are allowed.
c. (1) A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a tax credit pursuant to this section directly, but the amount of tax credit of a taxpayer in respect of a distributive share of entity income, shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the entity that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the entity for its taxable year ending within or with the taxpayer's taxable year.
(2) A New Jersey S Corporation shall not be allowed a tax credit pursuant to this section directly, but the amount of tax 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 tax 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.
3. The Director of the Division of Taxation in the Department of the Treasury, in consultation with the Secretary of Agriculture, shall adopt rules and regulations pursuant to the Administrative Procedure Act, P.L.1968, c.410 (C.52:14B-1 et seq.) as the director may deem necessary to effectuate sections 1 and 2 of this act.
4. This act shall take effect
immediately and shall apply to taxable years and privilege periods beginning on
or after the January 1 next following enactment.
STATEMENT
This bill, designated as the Grown Here, Eaten Here Act, provides Corporation Business Tax and New Jersey Gross Income Tax credits to qualifying food establishments for 10 percent of the costs of purchasing any fruits, vegetables, crops, and other ingredients that are grown or manufactured in the State for use in the preparation of foods or beverages at the qualifying food establishment.
Under the bill, a qualifying food establishment is defined to include a restaurant, a food manufacturing establishment, and a limited brewery license or restricted brewery licensed pursuant to R.S.33:1-10. The amount of the tax credit authorized under the bill may not exceed 50 percent of the tax liability otherwise due. Any unused credit amount not applied because of this limit may be carried forward for up to 20 of the next tax years. The Director of the Division of Taxation in the Department of the Treasury, in consultation with the Secretary of Agriculture, would be required to adopt rules and regulations necessary to administer the Grown Here, Eaten Here Act tax credit program.