Lawmakers approved a handful of measures offering tax relief to businesses for complying with COVID-19 requirements, and a clean-up bill for them to bypass the federal state and property tax cap, but failed to push through other key measures to ease the burden for New Jersey companies.
A key bill that would have allowed restaurants, bars, event spaces and other eateries to claim up to $150,000 in tax deductions for money they spent to comply with the round of strict COVID-19 business restrictions was vetoed on Jan. 10.
Gov. Phil Murphy, in his veto message, cited anxiety about tinkering with state tax code in the middle of the budget year; the state’s spending plan went into effect on July 1 and covers expenses and revenue through June 30 of this year.
“Rather than attempting to make mid-year changes to our agreed upon budget structure, a more appropriate approach to dealing with funding choices such as those presented by this bill is through the overall annual budget negotiation process,” the governor said Monday.
One measure would have created that same exact benefit, but applies to businesses with up to 50 employees. It, Senate Bill 4254, was approved by the state Senate in a 38-0 vote on Monday.
Murphy has until Jan. 18 to decide on the measures that did in fact land on his desk.
A closer look
Assembly Bill 4958, would let businesses with less than 20 employees apply for tax refunds on any sales tax they paid to “winterize their operations.” That means they could recoup costs for equipment such as tents, space heaters and snow and ice removal, so long as they were bought between Sept. 1, 2020, and March 31, 2021.
It was approved by the state Assembly on March 25 by a 72-0 vote, and the state Senate by a 39-0 vote on Jan. 10.
S4068 would tweak what’s known as the elective pass-through entity business alternative income tax, which allowed certain business owners to bypass the Trump-era $10,000 federal cap on state and local property tax deductions. “It shifted the tax from being paid by the individual shareholder to being paid by the entity itself, thereby creating the tax deduction. It was good on many fronts,” said Alan Sobel, a CPA and managing member of the accounting firm Sobel Co.
State treasury officials have noted in monthly revenue reports that the bill did not affect the amount of money in the state’s coffers but rather, the timing and means that the funds are paid to the state.
One proposal that passed both houses, A1269, would do away with a 1% tax on the sale of certain commercial properties – restaurants, shopping centers, malls, office buildings and theaters – on sales over $1 million. It was approved in the Assembly in December and passed the Senate on Jan. 10.
S3809, would create tax credits for businesses that hire workers with developmental disabilities, capped at $3,000 per employee and $60,000 per business each year. The bill was approved in a 39-0 vote by the Senate on Jan. 10, but has not moved forward in the state Assembly.
“This can open the doors of opportunity for those with disabilities, giving them the ability to gain the skills and experience to do the work they are fully capable of,” reads a statement from a key bill sponsor, the now-former Senate President Stephen Sweeney, D-3rd District.
“It can be the first step towards gainful employment where they will become valued workers,” continued Sweeney, whose daughter has down syndrome.
Another proposal, S4210, would create a state loan program for businesses to provide accommodations to employees with disabilities.[/vc_column_text][/vc_column][/vc_row]