ASSEMBLY, No. 5454 STATE OF NEW JERSEY 221st LEGISLATURE INTRODUCED MARCH 17, 2025
ASSEMBLY, No. 5454
STATE OF NEW JERSEY
221st LEGISLATURE
INTRODUCED MARCH 17, 2025
Sponsored by: Assemblywoman JESSICA RAMIREZ District 32 (Hudson) SYNOPSIS Provides CBT and GIT credits for undertaking of qualified moderate-income housing projects in certain distressed municipalities. CURRENT VERSION OF TEXT As introduced.
Sponsored by:
Assemblywoman JESSICA RAMIREZ
District 32 (Hudson)
SYNOPSIS
Provides CBT and GIT credits for undertaking of qualified moderate-income housing projects in certain distressed municipalities.
CURRENT VERSION OF TEXT
As introduced.
An Act providing corporation business and gross income tax credits for the undertaking of qualified moderate-income housing projects in certain municipalities, and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and Title 54A of the New Jersey Revised Statutes. Be It Enacted by the Senate and General Assembly of the State of New Jersey: 1. a. (1) A taxpayer shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), as calculated pursuant to paragraph (2) of this subsection, for the qualified construction costs incurred by the taxpayer during the privilege period for a qualified moderate-income housing project located in a qualified distressed municipality. (2) The amount of the credit authorized pursuant to this section shall not exceed the lesser of: (a) 25 percent of the total qualified construction costs incurred by the taxpayer during the privilege period; or (b) $1,000,000. b. (1) In order to claim the tax credit allowed pursuant to this section, a taxpayer shall submit an application to the director, in a form and manner prescribed by the director, demonstrating that the qualified moderate-income housing project undertaken by the taxpayer meets the requirements of this section. In addition to any other information or documentation that the director deems appropriate, the application shall also include a copy of any receipts or other documentation demonstrating the qualified construction costs incurred by the taxpayer. (2) The director shall review each application submitted by a taxpayer in accordance with this section and make a determination regarding the approval of the application within 90 calendar days of the date the completed application is received. The director shall issue a written certification to each taxpayer whose application has been reviewed and approved by the director in accordance with this section within five calendar days of the date the director's determination is made. A copy of the certification shall be included in the filing of a return that includes a claim for the credit. (3) If the director fails to make a determination regarding an application submitted pursuant to this subsection within 90 calendar days of the date the application is received, or if the director fails to issue a written certification within five calendar days of the date a determination is made, the application shall be deemed to have been approved and the written certification shall be deemed to have been issued by the director. Each taxpayer that submitted an application in accordance with this subsection but fails to receive a determination from the director within 90 calendar days of the date the application is submitted, or fails to receive a written certification from the director within five calendar days of the date of the director's determination is made, shall include a copy of the taxpayer's application when filing a return that includes a claim for the credit allowed in accordance with subsection a. of this section. c. The order of priority of the application of the credit allowed under this section, together with any other credits allowed by law shall be as prescribed by the Director of the Division of Taxation. The amount of 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 payments, credits, deductions, and adjustments allowed by law, shall not exceed 25 percent of the tax liability otherwise due and shall not reduce the tax liability for a privilege period 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 credit otherwise allowable under this section which 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 credit is allowed. d. (1) A taxpayer allowed a credit in accordance with subsection a. of this section may make and file an application with the director for a tax credit transfer certificate in lieu of the taxpayer being allowed any amount of the credit against the tax liability of the taxpayer. (2) Upon the review and approval of an application made and filed in accordance with this subsection, the director shall issue to the taxpayer a tax credit transfer certificate. The tax credit transfer certificate issued to a taxpayer by the director shall include a statement waiving the taxpayer's right to apply that amount of the credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) that the taxpayer has elected to sell to another person in exchange for private financial consideration. (3) The tax credit transfer certificate issued to a taxpayer by the director may be sold, in full or in part, to another person that may have a liability for tax under section 5 of P.L.1945, c.162 (C.54:10A-5), N.J.S.54A:1-1 et seq., sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5, in exchange for private financial consideration to be provided to the taxpayer by the person making the purchase. The sale of any amount of a tax credit transfer certificate issued to a taxpayer by the director shall not be made for private financial consideration of less than 75 percent of the transferred credit amount. (4) The amount of any tax credit transfer certificate that may be used by a purchaser against a tax liability of the purchaser under section 5 of P.L.1945, c.162 (C.54:10A-5), N.J.S.54A:1-1 et seq., sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5 shall be subject to any limitations and conditions on the application of tax credit transfer certificates that may be prescribed by the director. e. As used in this section: "Director" means Director of the Division of Taxation in the Department of the Treasury. "Moderate-income housing" means housing affordable, occupied, or reserved for occupancy by households with a gross household income equal to more than 50 percent but less than 80 percent of the median gross household income for households of the same size within the housing region in which the housing is located, according to United States Department of Housing and Urban Development or other recognized standards for home ownership and rental costs. "Qualified construction costs" means costs incurred in connection with the completion of a qualified moderate-income housing project, including, but not limited to, demolition of preexisting buildings, removal of debris, site remediation, or the repurposing of an existing building for residential use as part of a qualified moderate-income housing project. "Qualified distressed municipality" means a municipality in the State that is qualified to receive assistance under P.L.1978, c.14 (C.52:27D-178 et seq.), a municipality under the supervision of the Local Finance Board pursuant to the provisions of the "Local Government Supervision Act (1947)," P.L.1947, c.151 (C.52:27BB-1 et seq.), a municipality identified by the Director of the Division of Local Government Services in the Department of Community Affairs to be facing serious fiscal distress, a SDA municipality, or a municipality in which a major rail station is located. "Qualified moderate-income housing project" means development undertaken in a qualified distressed municipality for the purpose of creating one or more residential structures, whether in the form of detached units or attached units for separate occupancy, in which at least 80 percent of the housing units are reserved for moderate-income households. "Qualified moderate-income housing project" shall not include development in which any portion of the property is dedicated for commercial purposes. "Remediation" means the investigation, analysis, planning, monitoring, acquisition, removal, containment, remediation, construction, or improvement of any real property or building necessary or desirable for the cleanup of actual, potential, or perceived environmental contamination or pollution, including without limitation, water pollution, air pollution, pollution caused by solid waste disposal, thermal pollution, radiation contamination, or other general environmental contamination or pollution which is or may become injurious to the environment or to the public health, safety, or welfare. 2. a. (1) A taxpayer shall be allowed a credit against the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., as calculated pursuant to paragraph (2) of this subsection, for the qualified construction costs incurred by the taxpayer during the taxable year for a qualified moderate-income housing project located in a qualified distressed municipality. (2) The amount of the credit authorized pursuant to this section shall not exceed the lesser of: (a) 25 percent of the total qualified construction costs incurred by the taxpayer during the taxable year; or (b) $1,000,000. b. (1) In order to claim the tax credit allowed pursuant to this section, a taxpayer shall submit an application to the director, in a form and manner prescribed by the director, demonstrating that the qualified moderate-income housing project undertaken by the taxpayer meets the requirements of this section. In addition to any other information or documentation that the director deems appropriate, the application shall also include a copy of any receipts or other documentation demonstrating the qualified construction costs incurred by the taxpayer. (2) The director shall review each application submitted by a taxpayer in accordance with this section and make a determination regarding the approval of the application within 90 calendar days of the date the completed application is received. The director shall issue a written certification to each taxpayer whose application has been reviewed and approved by the director in accordance with this section within five calendar days of the date the director's determination is made. A copy of the certification shall be included in the filing of a return that includes a claim for the credit. (3) If the director fails to make a determination regarding an application submitted pursuant to this subsection within 90 calendar days of the date the application is received, or if the director fails to issue a written certification within five calendar days of the date a determination is made, the application shall be deemed to have been approved and the written certification shall be deemed to have been issued by the director. Each taxpayer that submitted an application in accordance with this subsection but fails to receive a determination from the director within 90 calendar days of the date the application is submitted, or fails to receive a written certification from the director within five calendar days of the date of the director's determination is made, shall include a copy of the taxpayer's application when filing a return that includes a claim for the credit allowed in accordance with subsection a. of this section. c. (1) A business entity that is classified as a partnership for federal income tax purposes shall not be allowed the credit directly under the gross income tax, but the amount of credit of the taxpayer with respect to a distributive share of partnership income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer's taxable year. (2) A taxpayer that is a New Jersey S corporation shall not be allowed the credit directly under the gross income tax, but the amount of credit of a taxpayer with respect to a pro rata share of S corporation income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the New Jersey S corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro rata share of S corporation income of the New Jersey S corporation for its privilege period ending within or with the taxpayer's taxable year. d. The order of priority of the application of the credit allowed pursuant to this section, together with any other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et seq. for a taxable year, shall be as prescribed by the director. The amount of the credit applied under this section against the New Jersey gross income tax imposed pursuant to N.J.S.54A:1-1 et seq. for a taxable year, when taken together with any other payments, credits, deductions, and adjustments allowed by law, shall not reduce a taxpayer's tax liability to an amount less than zero. The amount of the tax credit otherwise allowable under this section which cannot be applied for the taxable year due to the limitations of this section or other provisions of N.J.S.54A:1-1 et seq. may be carried forward, if necessary, to the seven taxable years following the taxable year for which the tax credit was allowed. e. (1) A taxpayer allowed a credit in accordance with subsection a. of this section may make and file an application with the director for a tax credit transfer certificate in lieu of the taxpayer being allowed any amount of the credit against the tax liability of the taxpayer. (2) Upon the review and approval of an application made and filed in accordance with this subsection, the director shall issue to the taxpayer a tax credit transfer certificate. The tax credit transfer certificate issued to a taxpayer by the director shall include a statement waiving the taxpayer's right to apply that amount of the credit against the tax imposed pursuant to N.J.S.54A:1-1 et seq. and that the taxpayer has elected to sell to another person in exchange for private financial consideration. (3) The tax credit transfer certificate issued to a taxpayer by the director may be sold, in full or in part, to another person that may have a liability for tax under section 5 of P.L.1945, c.162 (C.54:10A-5), N.J.S.54A:1-1 et seq., sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5, in exchange for private financial consideration to be provided to the taxpayer by the person making the purchase. The sale of any amount of a tax credit transfer certificate issued to a taxpayer by the director shall not be made for private financial consideration of less than 75 percent of the transferred credit amount. (4) The amount of any tax credit transfer certificate that may be used by a purchaser against a tax liability of the purchaser under section 5 of P.L.1945, c.162 (C.54:10A-5), N.J.S.54A:1-1 et seq., sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5 shall be subject to any limitations and conditions on the application of tax credit transfer certificates that may be prescribed by the director. f. As used in this section: "Director" means Director of the Division of Taxation in the Department of the Treasury. "Moderate-income housing" means housing affordable, occupied, or reserved for occupancy by households with a gross household income equal to more than 50 percent but less than 80 percent of the median gross household income for households of the same size within the housing region in which the housing is located, according to United States Department of Housing and Urban Development or other recognized standards for home ownership and rental costs. "Qualified construction costs" means costs incurred in connection with the completion of a qualified moderate-income housing project, including but not limited to, demolition of preexisting buildings, removal of debris, site remediation, or the repurposing of an existing building for residential use as part of a qualified moderate-income housing project. "Qualified distressed municipality" means a municipality in the State that is qualified to receive assistance under P.L.1978, c.14 (C.52:27D-178 et seq.), a municipality under the supervision of the Local Finance Board pursuant to the provisions of the "Local Government Supervision Act (1947)," P.L.1947, c.151 (C.52:27BB-1 et seq.), a municipality identified by the Director of the Division of Local Government Services in the Department of Community Affairs to be facing serious fiscal distress, a SDA municipality, or a municipality in which a major rail station is located. "Qualified moderate-income housing project" means development undertaken in a qualified distressed municipality for the purpose of creating one or more residential structures, whether in the form of detached units or attached units for separate occupancy, in which at least 80 percent of the housing units are reserved for moderate-income households. "Qualified moderate-income housing project" shall not include development in which any portion of the property is dedicated for commercial purposes. "Remediation" means the investigation, analysis, planning, monitoring, acquisition, removal, containment, remediation, construction, or improvement of any real property or building necessary or desirable for the cleanup of actual, potential, or perceived environmental contamination or pollution, including without limitation, water pollution, air pollution, pollution caused by solid waste disposal, thermal pollution, radiation contamination, or other general environmental contamination or pollution which is or may become injurious to the environment or to the public health, safety, or welfare. 3. The Director of the Division of Taxation in the Department of the Treasury shall adopt rules and regulations in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) as necessary to implement the provisions of this act. 4. This act shall take effect immediately and shall apply to privilege periods and taxable years beginning on or after January 1 of the year next following the date of enactment. STATEMENT This bill provides corporation business and gross income tax credits to taxpayers for qualified moderate-income housing projects undertaken in certain distressed municipalities. Specifically, the credits would be for either 25 percent or $1 million of the qualified construction costs incurred by the taxpayer, whichever is less, during the privilege period or taxable year for a qualified moderate-income housing project located in a qualified distressed municipality. In order to claim the tax credits allowed under the bill, a taxpayer would be required to submit an application to the Director of the Division of Taxation, in a form and manner prescribed by the director, demonstrating that the qualified moderate-income housing project undertaken by the taxpayer incurred qualified construction costs, and the amount of the tax credit the taxpayer is entitled to pursuant to the bill. Upon approval of the application, a copy of the certification issued by the director would be required to be included with the taxpayer's tax return when such return is filed. A taxpayer that is eligible to claim the credits would be permitted to apply for a tax credit transfer certificate with the Director of the Division of Taxation in lieu of having the credits applied against their tax liability. Upon issuance of the transfer certificate, the taxpayer would then be permitted to be sell the credits to another taxpayer with tax liability under certain other State taxes. If the sale of a transfer certificate occurs, it is required to be conducted for private financial consideration of no less than 75 percent of the transferred credit amount. The bill defines a "qualified moderate-income housing project" as development undertaken in a qualified distressed municipality for the purpose of creating one or more residential structures, whether in the form of detached units or attached units for separate occupancy, in which a substantial percentage of the housing units are reserved for moderate-income housing. The bill specifically prohibits a qualified moderate-income housing project from including development in which any portion is dedicated for commercial purposes. The bill also defines a "moderate-income household" as housing affordable, occupied, or reserved for occupancy by households with a gross household income equal to more than 50 percent but less than 80 percent of the median gross household income for households of the same size within the housing region in which the housing is located, according to United States Department of Housing and Urban Development or other recognized standards for home ownership and rental costs. The bill further defines a "qualified distressed municipality" as a municipality in the State that is qualified to receive assistance as an urban aid municipality, a municipality under the supervision of the Local Finance Board within the Division of Local Government Services, a municipality identified by the Director of the Division of Local Government Services in the Department of Community Affairs to be facing serious fiscal distress, a SDA municipality, or a municipality in which a major rail station is located.
An Act providing corporation business and gross income tax credits for the undertaking of qualified moderate-income housing projects in certain municipalities, and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and Title 54A of the New Jersey Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. (1) A taxpayer shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), as calculated pursuant to paragraph (2) of this subsection, for the qualified construction costs incurred by the taxpayer during the privilege period for a qualified moderate-income housing project located in a qualified distressed municipality.
(2) The amount of the credit authorized pursuant to this section shall not exceed the lesser of: (a) 25 percent of the total qualified construction costs incurred by the taxpayer during the privilege period; or (b) $1,000,000.
b. (1) In order to claim the tax credit allowed pursuant to this section, a taxpayer shall submit an application to the director, in a form and manner prescribed by the director, demonstrating that the qualified moderate-income housing project undertaken by the taxpayer meets the requirements of this section. In addition to any other information or documentation that the director deems appropriate, the application shall also include a copy of any receipts or other documentation demonstrating the qualified construction costs incurred by the taxpayer.
(2) The director shall review each application submitted by a taxpayer in accordance with this section and make a determination regarding the approval of the application within 90 calendar days of the date the completed application is received. The director shall issue a written certification to each taxpayer whose application has been reviewed and approved by the director in accordance with this section within five calendar days of the date the director's determination is made. A copy of the certification shall be included in the filing of a return that includes a claim for the credit.
(3) If the director fails to make a determination regarding an application submitted pursuant to this subsection within 90 calendar days of the date the application is received, or if the director fails to issue a written certification within five calendar days of the date a determination is made, the application shall be deemed to have been approved and the written certification shall be deemed to have been issued by the director. Each taxpayer that submitted an application in accordance with this subsection but fails to receive a determination from the director within 90 calendar days of the date the application is submitted, or fails to receive a written certification from the director within five calendar days of the date of the director's determination is made, shall include a copy of the taxpayer's application when filing a return that includes a claim for the credit allowed in accordance with subsection a. of this section.
c. The order of priority of the application of the credit allowed under this section, together with any other credits allowed by law shall be as prescribed by the Director of the Division of Taxation. The amount of 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 payments, credits, deductions, and adjustments allowed by law, shall not exceed 25 percent of the tax liability otherwise due and shall not reduce the tax liability for a privilege period 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 credit otherwise allowable under this section which 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 credit is allowed.
d. (1) A taxpayer allowed a credit in accordance with subsection a. of this section may make and file an application with the director for a tax credit transfer certificate in lieu of the taxpayer being allowed any amount of the credit against the tax liability of the taxpayer.
(2) Upon the review and approval of an application made and filed in accordance with this subsection, the director shall issue to the taxpayer a tax credit transfer certificate. The tax credit transfer certificate issued to a taxpayer by the director shall include a statement waiving the taxpayer's right to apply that amount of the credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) that the taxpayer has elected to sell to another person in exchange for private financial consideration.
(3) The tax credit transfer certificate issued to a taxpayer by the director may be sold, in full or in part, to another person that may have a liability for tax under section 5 of P.L.1945, c.162 (C.54:10A-5), N.J.S.54A:1-1 et seq., sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5, in exchange for private financial consideration to be provided to the taxpayer by the person making the purchase. The sale of any amount of a tax credit transfer certificate issued to a taxpayer by the director shall not be made for private financial consideration of less than 75 percent of the transferred credit amount.
(4) The amount of any tax credit transfer certificate that may be used by a purchaser against a tax liability of the purchaser under section 5 of P.L.1945, c.162 (C.54:10A-5), N.J.S.54A:1-1 et seq., sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5 shall be subject to any limitations and conditions on the application of tax credit transfer certificates that may be prescribed by the director.
e. As used in this section:
"Director" means Director of the Division of Taxation in the Department of the Treasury.
"Moderate-income housing" means housing affordable, occupied, or reserved for occupancy by households with a gross household income equal to more than 50 percent but less than 80 percent of the median gross household income for households of the same size within the housing region in which the housing is located, according to United States Department of Housing and Urban Development or other recognized standards for home ownership and rental costs.
"Qualified construction costs" means costs incurred in connection with the completion of a qualified moderate-income housing project, including, but not limited to, demolition of preexisting buildings, removal of debris, site remediation, or the repurposing of an existing building for residential use as part of a qualified moderate-income housing project.
"Qualified distressed municipality" means a municipality in the State that is qualified to receive assistance under P.L.1978, c.14 (C.52:27D-178 et seq.), a municipality under the supervision of the Local Finance Board pursuant to the provisions of the "Local Government Supervision Act (1947)," P.L.1947, c.151 (C.52:27BB-1 et seq.), a municipality identified by the Director of the Division of Local Government Services in the Department of Community Affairs to be facing serious fiscal distress, a SDA municipality, or a municipality in which a major rail station is located.
"Qualified moderate-income housing project" means development undertaken in a qualified distressed municipality for the purpose of creating one or more residential structures, whether in the form of detached units or attached units for separate occupancy, in which at least 80 percent of the housing units are reserved for moderate-income households. "Qualified moderate-income housing project" shall not include development in which any portion of the property is dedicated for commercial purposes.
"Remediation" means the investigation, analysis, planning, monitoring, acquisition, removal, containment, remediation, construction, or improvement of any real property or building necessary or desirable for the cleanup of actual, potential, or perceived environmental contamination or pollution, including without limitation, water pollution, air pollution, pollution caused by solid waste disposal, thermal pollution, radiation contamination, or other general environmental contamination or pollution which is or may become injurious to the environment or to the public health, safety, or welfare.
2. a. (1) A taxpayer shall be allowed a credit against the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., as calculated pursuant to paragraph (2) of this subsection, for the qualified construction costs incurred by the taxpayer during the taxable year for a qualified moderate-income housing project located in a qualified distressed municipality.
(2) The amount of the credit authorized pursuant to this section shall not exceed the lesser of: (a) 25 percent of the total qualified construction costs incurred by the taxpayer during the taxable year; or (b) $1,000,000.
b. (1) In order to claim the tax credit allowed pursuant to this section, a taxpayer shall submit an application to the director, in a form and manner prescribed by the director, demonstrating that the qualified moderate-income housing project undertaken by the taxpayer meets the requirements of this section. In addition to any other information or documentation that the director deems appropriate, the application shall also include a copy of any receipts or other documentation demonstrating the qualified construction costs incurred by the taxpayer.
(2) The director shall review each application submitted by a taxpayer in accordance with this section and make a determination regarding the approval of the application within 90 calendar days of the date the completed application is received. The director shall issue a written certification to each taxpayer whose application has been reviewed and approved by the director in accordance with this section within five calendar days of the date the director's determination is made. A copy of the certification shall be included in the filing of a return that includes a claim for the credit.
(3) If the director fails to make a determination regarding an application submitted pursuant to this subsection within 90 calendar days of the date the application is received, or if the director fails to issue a written certification within five calendar days of the date a determination is made, the application shall be deemed to have been approved and the written certification shall be deemed to have been issued by the director. Each taxpayer that submitted an application in accordance with this subsection but fails to receive a determination from the director within 90 calendar days of the date the application is submitted, or fails to receive a written certification from the director within five calendar days of the date of the director's determination is made, shall include a copy of the taxpayer's application when filing a return that includes a claim for the credit allowed in accordance with subsection a. of this section.
c. (1) A business entity that is classified as a partnership for federal income tax purposes shall not be allowed the credit directly under the gross income tax, but the amount of credit of the taxpayer with respect to a distributive share of partnership income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer's taxable year.
(2) A taxpayer that is a New Jersey S corporation shall not be allowed the credit directly under the gross income tax, but the amount of credit of a taxpayer with respect to a pro rata share of S corporation income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the New Jersey S corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro rata share of S corporation income of the New Jersey S corporation for its privilege period ending within or with the taxpayer's taxable year.
d. The order of priority of the application of the credit allowed pursuant to this section, together with any other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et seq. for a taxable year, shall be as prescribed by the director. The amount of the credit applied under this section against the New Jersey gross income tax imposed pursuant to N.J.S.54A:1-1 et seq. for a taxable year, when taken together with any other payments, credits, deductions, and adjustments allowed by law, shall not reduce a taxpayer's tax liability to an amount less than zero. The amount of the tax credit otherwise allowable under this section which cannot be applied for the taxable year due to the limitations of this section or other provisions of N.J.S.54A:1-1 et seq. may be carried forward, if necessary, to the seven taxable years following the taxable year for which the tax credit was allowed.
e. (1) A taxpayer allowed a credit in accordance with subsection a. of this section may make and file an application with the director for a tax credit transfer certificate in lieu of the taxpayer being allowed any amount of the credit against the tax liability of the taxpayer.
(2) Upon the review and approval of an application made and filed in accordance with this subsection, the director shall issue to the taxpayer a tax credit transfer certificate. The tax credit transfer certificate issued to a taxpayer by the director shall include a statement waiving the taxpayer's right to apply that amount of the credit against the tax imposed pursuant to N.J.S.54A:1-1 et seq. and that the taxpayer has elected to sell to another person in exchange for private financial consideration.
(3) The tax credit transfer certificate issued to a taxpayer by the director may be sold, in full or in part, to another person that may have a liability for tax under section 5 of P.L.1945, c.162 (C.54:10A-5), N.J.S.54A:1-1 et seq., sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5, in exchange for private financial consideration to be provided to the taxpayer by the person making the purchase. The sale of any amount of a tax credit transfer certificate issued to a taxpayer by the director shall not be made for private financial consideration of less than 75 percent of the transferred credit amount.
(4) The amount of any tax credit transfer certificate that may be used by a purchaser against a tax liability of the purchaser under section 5 of P.L.1945, c.162 (C.54:10A-5), N.J.S.54A:1-1 et seq., sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5 shall be subject to any limitations and conditions on the application of tax credit transfer certificates that may be prescribed by the director.
f. As used in this section:
"Director" means Director of the Division of Taxation in the Department of the Treasury.
"Moderate-income housing" means housing affordable, occupied, or reserved for occupancy by households with a gross household income equal to more than 50 percent but less than 80 percent of the median gross household income for households of the same size within the housing region in which the housing is located, according to United States Department of Housing and Urban Development or other recognized standards for home ownership and rental costs.
"Qualified construction costs" means costs incurred in connection with the completion of a qualified moderate-income housing project, including but not limited to, demolition of preexisting buildings, removal of debris, site remediation, or the repurposing of an existing building for residential use as part of a qualified moderate-income housing project.
"Qualified distressed municipality" means a municipality in the State that is qualified to receive assistance under P.L.1978, c.14 (C.52:27D-178 et seq.), a municipality under the supervision of the Local Finance Board pursuant to the provisions of the "Local Government Supervision Act (1947)," P.L.1947, c.151 (C.52:27BB-1 et seq.), a municipality identified by the Director of the Division of Local Government Services in the Department of Community Affairs to be facing serious fiscal distress, a SDA municipality, or a municipality in which a major rail station is located.
"Qualified moderate-income housing project" means development undertaken in a qualified distressed municipality for the purpose of creating one or more residential structures, whether in the form of detached units or attached units for separate occupancy, in which at least 80 percent of the housing units are reserved for moderate-income households. "Qualified moderate-income housing project" shall not include development in which any portion of the property is dedicated for commercial purposes.
"Remediation" means the investigation, analysis, planning, monitoring, acquisition, removal, containment, remediation, construction, or improvement of any real property or building necessary or desirable for the cleanup of actual, potential, or perceived environmental contamination or pollution, including without limitation, water pollution, air pollution, pollution caused by solid waste disposal, thermal pollution, radiation contamination, or other general environmental contamination or pollution which is or may become injurious to the environment or to the public health, safety, or welfare.
3. The Director of the Division of Taxation in the Department of the Treasury shall adopt rules and regulations in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) as necessary to implement the provisions of this act.
4. This act shall take effect immediately and shall apply to privilege periods and taxable years beginning on or after January 1 of the year next following the date of enactment.
STATEMENT
This bill provides corporation business and gross income tax credits to taxpayers for qualified moderate-income housing projects undertaken in certain distressed municipalities. Specifically, the credits would be for either 25 percent or $1 million of the qualified construction costs incurred by the taxpayer, whichever is less, during the privilege period or taxable year for a qualified moderate-income housing project located in a qualified distressed municipality.
In order to claim the tax credits allowed under the bill, a taxpayer would be required to submit an application to the Director of the Division of Taxation, in a form and manner prescribed by the director, demonstrating that the qualified moderate-income housing project undertaken by the taxpayer incurred qualified construction costs, and the amount of the tax credit the taxpayer is entitled to pursuant to the bill. Upon approval of the application, a copy of the certification issued by the director would be required to be included with the taxpayer's tax return when such return is filed.
A taxpayer that is eligible to claim the credits would be permitted to apply for a tax credit transfer certificate with the Director of the Division of Taxation in lieu of having the credits applied against their tax liability. Upon issuance of the transfer certificate, the taxpayer would then be permitted to be sell the credits to another taxpayer with tax liability under certain other State taxes. If the sale of a transfer certificate occurs, it is required to be conducted for private financial consideration of no less than 75 percent of the transferred credit amount.
The bill defines a "qualified moderate-income housing project" as development undertaken in a qualified distressed municipality for the purpose of creating one or more residential structures, whether in the form of detached units or attached units for separate occupancy, in which a substantial percentage of the housing units are reserved for moderate-income housing. The bill specifically prohibits a qualified moderate-income housing project from including development in which any portion is dedicated for commercial purposes.
The bill also defines a "moderate-income household" as housing affordable, occupied, or reserved for occupancy by households with a gross household income equal to more than 50 percent but less than 80 percent of the median gross household income for households of the same size within the housing region in which the housing is located, according to United States Department of Housing and Urban Development or other recognized standards for home ownership and rental costs.
The bill further defines a "qualified distressed municipality" as a municipality in the State that is qualified to receive assistance as an urban aid municipality, a municipality under the supervision of the Local Finance Board within the Division of Local Government Services, a municipality identified by the Director of the Division of Local Government Services in the Department of Community Affairs to be facing serious fiscal distress, a SDA municipality, or a municipality in which a major rail station is located.