Sponsored by:
Assemblyman ROY FREIMAN
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
SYNOPSIS
Allows certain microbusiness cannabis licensees to accelerate depreciation of property under corporation business and gross income taxes.
CURRENT VERSION OF TEXT
As introduced.
An Act allowing certain microbusiness cannabis licensees to accelerate depreciation of property under corporation business and gross income taxes, supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and Title 54A of Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. Notwithstanding paragraph (12) of subsection (k) of section 4 of P.L.1945, c.162 (C.54:10A-4), a taxpayer who is a microbusiness cannabis licensee operating in an impact zone shall be allowed the additional depreciation allowance of subsection (k) of section 168 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.168) for up to $250,000 of aggregate property costs of the cannabis business. The director shall prescribe the rules and regulations necessary to carry out the provisions of this section.
b. As used in this section:
Cannabis licensee means the same as defined in section 3 of P.L. , c. (C. ) (pending before the Legislature as Assembly Bill No. 21 and Senate Bill No. 21) of 2020.
Microbusiness means the same as defined in section 3 of P.L. , c. (C. ) (pending before the Legislature as Assembly Bill No. 21 and Senate Bill No. 21) of 2020.
Impact zone means the same as defined in section 3 of P.L. , c. (C. ) (pending before the Legislature as Assembly Bill No. 21and Senate Bill No. 21 of 2020.
2. a. Notwithstanding section 26 of P.L.2004, c.65 (C.54A:5-1.2), a taxpayer who is a microbusiness cannabis licensee operating in an impact zone shall be allowed the additional depreciation allowance of subsection (k) of section 168 of the federal Internal Revenue Code of 1986 (26 U.S.C. s.168) for up to $250,000 of aggregate property costs of the cannabis business; provided that, section 26 of P.L.2004, c.65 (C.54A:5-1.2) prohibited such additional depreciation allowance. . The director shall prescribe the rules and regulations necessary to carry out the provisions of this section.
b. As used in this section:
Cannabis licensee means the same as defined in section 3 of P.L. , c. (C. ) (pending before the Legislature as Assembly Bill No. 21 and Senate Bill No. 21) of 2020.
Microbusiness means the same as defined in section 3 of P.L. , c. (C. ) (pending before the Legislature as Assembly Bill No. 21 and Senate Bill No. 21 of 2020.
Impact zone means the same
as defined in section 3 of P.L. , c. (C. ) (pending before the
Legislature as Assembly Bill No. 21 and Senate Bill No. 21 of 2020.
3. This act shall take effect immediately.
STATEMENT
This bill allows microbusinesses cannabis licensees who operate in impact zones to use a bonus depreciation allowance on up to $250,000 of property. The bonus depreciation allowance allows a business to immediately deduct a large percentage of the purchase price of certain assets. New Jersey had decoupled from the federal rules regarding bonus depreciation in 2002. This bill allows certain microbusinesses to use a bonus depreciation allowance similar to the federal bonus depreciation of the Tax Cuts and Jobs Act.
The Director of the Division of Taxation in the Department of Treasury will establish rules and regulations to carry out this provision.
The terms cannabis licensee, microbusinesses, and impact zones have the same meaning as in Senate Bill No. 21 and Assembly Bill No. 21 of 2020.