Sponsored by:
Senator VIN GOPAL
District 11 (Monmouth)
Senator LINDA R. GREENSTEIN
District 14 (Mercer and Middlesex)
Co-Sponsored by:
Senators A.M.Bucco and Testa
SYNOPSIS
Provides tax credits to small businesses to offset increases in unemployment insurance contributions.
CURRENT VERSION OF TEXT
As introduced.
An Act providing tax credits to small businesses to offset certain increases in their unemployment insurance contributions, 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. (1) For privilege periods beginning in Calendar Year 2023, a taxpayer that is a small business shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to the difference in the small businesss unemployment insurance contributions for Fiscal Year 2023 as required pursuant to R.S.43:21-7(c)(5)(P) and the amount the small business would have otherwise contributed if contributions for Fiscal Year 2023 were computed based on rates set by column C of the table in R.S.43:21-7(c)(5)(E); provided, however, if the actual fund reserve ratio results in the contribution rate for employers being set by a column that has a lower tax rate than the rates provided in column C, the tax credit provided pursuant to the paragraph shall not be made available.
(2) For privilege periods beginning in Calendar Year 2024, a taxpayer that is a small business shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to the difference in the small businesss unemployment insurance contributions for Fiscal Year 2024 as required pursuant to R.S.43:21-7(c)(5)(Q) and the amount the small business would have otherwise contributed if contributions for Fiscal Year 2024 were computed based on rates set by column C of the table in R.S.43:21-7(c)(5)(E); provided, however, if the actual fund reserve ratio results in the contribution rate for employers being set by a column that has a lower tax rate than the rates provided in column C, the tax credit provided pursuant to the paragraph shall not be made available.
(3) For privilege periods beginning in any calendar year after Calendar Year 2024 in which the rate of unemployment insurance contributions is greater than the rates set by column C of the table in R.S.43:21-7(c)(5)(E) and ending with the first calendar year in which the rate of unemployment insurance contributions is equal to or less than the rates set by column C of that table, a taxpayer that is a small business shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to the difference in the small businesss unemployment insurance contributions for Fiscal Year 2024 as required pursuant to R.S.43:21-7(c)(5)(Q) and the amount the small business would have otherwise contributed if contributions for Fiscal Year 2024 were computed based on rates set by column C of the table in R.S.43:21-7(c)(5)(E); provided, however, if the actual fund reserve ratio results in the contribution rate for employers being set by a column that has a lower tax rate than the rates provided in column C, the tax credit provided pursuant to the paragraph shall not be made available.
b. No tax credits shall be allowed pursuant to this section for any amount of the increase in a small businesss unemployment insurance contributions that is offset by grants or other subsidies made available for similar purposes.
c. A taxpayer shall apply in a form and manner to be determined by the director for the tax credits provided pursuant to this section. 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.
d. The amount of the credits applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for a privilege period, together with any other credits allowed by law 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 tax credits otherwise allowable under this section that cannot be applied for the privilege period due to the limitations of this subsection or under other provisions of P.L.1945, c.162 (C.54:10A-1 et seq.) may be carried forward, if necessary, to the seven privilege periods following the privilege period for which the tax credit was allowed.
e. As used in this section:
"Small business" means a small business as defined by the United States Small Business Administration that for purposes of size standards or other factors meets the applicable criteria set forth in Part 121 of Title 13 of the Code of Federal Regulations as amended, which has its principal place of business in New Jersey, and is independently owned and operated.
2. a. (1) For taxable years beginning in Calendar Year 2023, a taxpayer that is a small business 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 the difference in the small businesss unemployment insurance contributions for Fiscal Year 2023 as required pursuant to R.S.43:21-7(c)(5)(P) and the amount the small business would have otherwise contributed if contributions for Fiscal Year 2023 were computed based on rates set by column C of the table in R.S.43:21-7(c)(5)(E); provided, however, if the actual fund reserve ratio results in the contribution rate for employers being set by a column that has a lower tax rate than the rates provided in column C, the tax credit provided pursuant to the paragraph shall not be made available.
(2) For taxable years beginning in Calendar Year 2024, a taxpayer that is a small business 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 the difference in the small businesss unemployment insurance contributions for Fiscal Year 2024 as required pursuant to R.S.43:21-7(c)(5)(Q) and the amount the small business would have otherwise contributed if contributions for Fiscal Year 2024 were computed based on rates set by column C of the table in R.S.43:21-7(c)(5)(E); provided, however, if the actual fund reserve ratio results in the contribution rate for employers being set by a column that has a lower tax rate than the rates provided in column C, the tax credit provided pursuant to the paragraph shall not be made available.
(3) For privilege periods beginning in any calendar year after Calendar Year 2024 in which the rate of unemployment insurance contributions is greater than the rates set by column C of the table in R.S.43:21-7(c)(5)(E) and ending with the first calendar year in which the rate of unemployment insurance contributions is equal to or less than the rates set by column C of that table, a taxpayer that is a small business 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 the difference in the small businesss unemployment insurance contributions for Fiscal Year 2024 as required pursuant to R.S.43:21-7(c)(5)(Q) and the amount the small business would have otherwise contributed if contributions for Fiscal Year 2024 were computed based on rates set by column C of the table in R.S.43:21-7(c)(5)(E); provided, however