New Jersey Senate Bill S2875

New Jersey 2022-2023 Regular Session

• Introduced: 6/20/22
• Refer: 6/20/22
• Report Pass: 11/3/22
• Refer: 11/3/22

Caption

Allows taxpayers to utilize alternative method of depreciation of certain expenditures in connection with construction of new affordable housing developments.

Impact

The legislation is set to impact the existing framework of both the Corporation Business Tax and the New Jersey Gross Income Tax by modifying how taxpayers can claim depreciation deductions. By implementing a formula that favors developments with a higher percentage of affordable housing units, the bill seeks to encourage the growth of affordable housing in New Jersey, thereby addressing housing shortages and affordability issues in the state. It establishes clear parameters defining 'affordable housing' to ensure that the intended beneficiaries of the legislation are well-defined.

Summary

Senate Bill S2875, introduced in New Jersey, aims to enhance the affordability and production of housing by allowing taxpayers to utilize an alternative method of depreciation for certain expenditures. Specifically, the bill allows for a percentage of capital expenditures related to the construction of new affordable housing developments to be depreciated over a ten-year period. This is significant as it offers financial incentives aimed at reducing the burden of development costs for new affordable housing projects.

Contention

While the bill has been reported favorably by the Senate Economic Growth Committee, it may still face scrutiny and contention from various stakeholders. Some advocates argue that the approach taken by this bill may not sufficiently address deeper systemic issues regarding housing scarcity and affordability. Critics might voice concerns that the focus on tax incentives alone does not address the need for increased funding and support for public housing initiatives, which could lead to a debate on the most effective means of addressing housing needs in New Jersey.