LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
SENATE, No. 2200
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: AUGUST 15, 2024
SUMMARY
Synopsis: Creates pilot program to provide corporation business tax and gross
income tax credits for value of certain fruit and vegetable donations
made by commercial farm operators.
Type of Impact: Multi-year State revenue decrease to the General Fund and Property
Tax Relief Fund.
Agencies Affected: Department of the Treasury.
Office of Legislative Services Estimate
Fiscal Impact Eight-Year Period After Enactment
Aggregate State Revenue Decrease $300,000
 The Office of Legislative Services (OLS) concludes that this bill will result in a $300,000
reduction in State revenues over a period of up to eight years associated with the provision of
tax credits to commercial farm operators who donate certain fruits and vegetables. This pilot
program would run for three years, beginning on January 1 of the year following the bill's
enactment, and unused tax credits could be carried forward for up to five taxable periods.
BILL DESCRIPTION
This bill creates a pilot program that provides a credit against the corporation business tax and
the gross income tax for the value of certain donations of fruits and vegetables that are made to
charitable organizations by commercial farm operators over a three-year period beginning January
1 of the year following the bill’s enactment.
Under the bill, commercial farm operators who make donations of fruits or vegetables fit for
human consumption to a charitable organization located in this State would be allowed to claim a
credit that can be used to reduce the commercial farm operator's tax liability. The credit would be
equal to 50 percent of the wholesale value for the fruits or vegetables donated to the charitable
organization during the tax period of the donation, but not to exceed $5,000, as determined using
a quantity-weighted average of comparable wholesale sales of similar fruits or vegetables made
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
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by the commercial farm operator during the month of the donation or, if no comparable sales are
made, the overall average price paid for similar fruits or vegetables at the nearest regional market
during the month of the donation. The bill would require commercial farm operators claiming the
credit to obtain a written statement from the charitable organization to verify each donation of
fruits or vegetables. The aggregate value of tax credit amounts awarded under the pilot program
would be capped at $100,000 in any fiscal year.
The Division of Taxation in the Department of the Treasury would be required to prepare an
annual report on the utilization of the credits provided by the bill for each year of the three-year
pilot program period. The final annual report would include recommendations on whether the
credit program should be continued and if the credit percentage should be increased.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that tax credits awarded under the bill will reach the cap, resulting in a
$300,000 reduction in State revenues over a period of up to eight years.
The OLS assumes a range of producer costs, noting that producer behavior can vary widely
and that there does not appear to be publicly available information regarding the exact value of
fruits and vegetables produced and donated in New Jersey. For purposes of estimating potential
revenue losses to the State resulting from the provisions of the bill, the OLS makes certain
assumptions concerning the behavior of market participants. With respect to the percentage of
fruits and vegetables produced in New Jersey that will be donated and utilize the tax credit
program, the OLS assumes that the behavior of market participants will be similar to when
California enacted a similar law.
Based on those assumptions and the ensuing calculations, the OLS estimates that the issuance
of tax credits would be limited by the annual aggregate cap of $100,000 during each fiscal year in
which the pilot program is operated. Also, the OLS notes that tax credits under the bill may be
carried forward up to five years following the final year during which the tax credits are awarded
(i.e., the third privilege period or taxable year, as applicable, beginning after the enactment of the
bill). Consequently, the OLS anticipates that the bill will result in a $300,000 reduction in State
revenues over a period of up to eight years in which these tax credits could be claimed.
Section: Revenue, Finance, and Appropriations
Analyst: Patrick Walsh
Assistant Fiscal Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).