ASSEMBLY COMMERCE, ECONOMIC DEVELOPMENT AND
AGRICULTURE COMMITTEE
STATEMENT TO
ASSEMBLY, No. 3899
with committee amendments
STATE OF NEW JERSEY
DATED: OCTOBER 24, 2024
The Assembly Commerce, Economic Development and
Agriculture Committee reports favorably and with committee
amendments Assembly Bill No. 3899.
As amended and reported, this bill creates a pilot program that
provides a tax credit against the corporation business tax and the gross
income tax based on the value of certain donated fruits and vegetables.
Specifically, the tax credit is available to commercial farm operators
who donate fruits or vegetables that are fit for human consumption to a
charitable organization located in this State during the first three tax
periods beginning on or after January 1 of the year next following the
date of the bill’s enactment. The amount of the credit is equal to 50
percent of the wholesale value of the fruits or vegetables donated, but
not to exceed the value of $5,000 during each tax period. However, if
a commercial farm operator is unable to claim any portion of the credit
otherwise permitted for a tax period, the unused credits can be carried
forward for the earliest available use during the next five tax periods
following the period for which the credits were allowed.
Under the bill, a commercial farm operator is required to obtain a
written statement from the charitable organization before claiming the
tax credit. In addition to certain other information, this statement is to
specify the variety, grade, and quantity of the donated fruits and
vegetables and the wholesale value of the fruits and vegetables, as
provided by the commercial farm operator. The bill requires a
commercial farm operator to include a copy of each statement issued
by a charitable organization when filing a tax return that claims the
credit.
The bill also requires the Director of the Division of Taxation in
the Department of the Treasury (director) to prepare an annual report
on the utilization of the credits provided on or before December 1
beginning in the year next following the first year in which the
utilization of tax credits is permitted pursuant to the bill. However, if
the director fails to prepare the annual report before the required date
of completion, the director is required to testify before the Senate
Economic Growth Committee, the Assembly Commerce, Economic 2
Development and Agriculture Committee, or any other legislative
committee determined by the President of the Senate or the Speaker of
the General Assembly, to explain the delay. In addition to certain
requirements for each annual report required by the bill, the director is
to provide recommendations in the final report as to whether: (1) the
allowance of tax credits pursuant to the bill’s provisions should be
continued; and (2) the percentage of the wholesale value of the fruits
or vegetables donated to a charitable organization used to determine
amounts of tax credits should be increased, and if so, to what
percentage.
The total value of tax credit amounts awarded under the bill’s
provisions is limited to $100,000 in any fiscal year.
COMMITTEE AMENDMENTS :
The committee amended the bill to:
(1) create a pilot program to provide that the credit allowed
pursuant to the bill is to be available for the first three tax periods
beginning on or after January 1 of the year next following the date of
the bill’s enactment, rather than on or after January 1, 2024 but before
January 1, 2029 as previously provided in the bill;
(2) permit a commercial farm operator that makes a donation
pursuant to the bill’s provisions to receive credit toward the
corporation business tax and the gross income tax in an amount equal
to 50 percent of the wholesale value of the fruits or vegetables
donated, but not to exceed the value of $5,000 during each tax period.
In the bill as introduced, this credit was to be 10 percent for each tax
period;
(3) require the director to file three annual reports pursuant to the
bill, rather than five annual reports as previously required, on or before
December 1, beginning in the year next following the first year in
which the utilization of tax credits is permitted pursuant to the bill;
(4) require that if the report required by the bill is not filed by its
due date, the director is to appear before this committee or the
Assembly Commerce, Economic Development and Agriculture
Committee, or their successor committees, or another committee
determined by the President of the Senate or the Speaker of the
General Assembly. The Assembly Commerce, Economic
Development and Agriculture Committee replaces the Assembly
Agriculture and Food Security Committee in this provision;
(5) require the director to provide recommendations in the final
annual report required by the bill as to whether the allowance of tax
credits pursuant to the bill’s provisions should be continued and
whether the percentage of the wholesale value of the fruits or
vegetables donated to a charitable organization used to determine
amounts of tax credits should be increased, and if so, to what
percentage; 3
(6) limit the total value of tax credit amounts awarded under the
bill’s provisions to $100,000 in any fiscal year;
(7) remove section 4 of the bill, which required the Department of
Agriculture to maintain a list of all approved charitable organizations
that commercial farms may select when making food donations for the
purposes of receiving a tax credit pursuant to the bill;
(8) update the title and synopsis to reflect changes to the bill; and
(9) make technical changes to the bill.