A 3899 New Jersey General Assembly · 2024-2025 Regular Session

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.*

This bill creates a 10% tax credit against New Jersey's corporation business tax and gross income tax for commercial farm operators who donate eligible fruits and vegetables (fit for human consumption) to qualifying charitable organizations in New Jersey. To claim the credit, farms must obtain written verification from the charity detailing the donation's value, quantity, and origin, and submit it with their tax return. Unused credits can be carried forward for up to five years, but the total credit cannot exceed 50% of a farm's tax liability for the period. The bill also requires the state tax division to publish annual reports tracking credit usage, donation volumes, and beneficiary organizations.

Issues: ✗ Budget & Taxes

Sub-Topics: Business Taxes Income Tax

Bill status in committee 1 of 4 stages cleared

Introduction

Feb 2024

Committee Review

Floor Vote

Governor

Introduced Feb 27, 2024 Last action Jan 16, 2025

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What changed between versions

Reprint ACE 10/24/24 1R → Reprint ACW 1/16/25 2R · 9 edits

MAJOR

The bill was moved from the Commerce, Economic Development and Agriculture Committee to the Community Development and Women's Affairs Committee, with three new co-sponsors added. The most significant policy changes are the addition of a new administrative role for the Department of Agriculture: the Secretary of Agriculture must now establish monthly wholesale values for donated produce, prepare a standard donation statement form, approve farm operator submissions before tax credits are issued, and co-author the annual program report. The Office of the Food Security Advocate's role in maintaining a list of approved charitable organizations was removed.

Scope change

The Department of Agriculture's role expanded significantly from a passive listing function (now removed) to an active administrative gatekeeper that sets wholesale values, approves credit claims, and co-authors program reports. The bill's oversight structure shifted from being primarily a tax administration matter to a joint agriculture-and-taxation effort.

REQUIREMENT

The Secretary of Agriculture must establish and publish the wholesale value of fruits or vegetables each month during the pilot program for purposes of calculating the tax credit, and must prepare a written statement form for use by charitable organization staff accepting donations.

The previous requirement that farm operators include copies of written statements directly on their tax return filings was removed (bracketed), replaced by the new Department of Agriculture submission and approval process.

The responsibility for including recommendations in the final annual report on whether to continue the program and whether to increase the credit percentage was transferred from the Director of the Division of Taxation to the Secretary of Agriculture.

ENFORCEMENT

A new administrative approval process was added: commercial farm operators must submit the charitable organization's written statement to the Department of Agriculture, and only upon departmental approval will the Director of the Division of Taxation be notified of the operator's eligibility for the tax credit.

The annual program report is now to be prepared by the Secretary of Agriculture in consultation with the Director of the Division of Taxation, rather than solely by the Director. The report must also be posted on the Department of Agriculture's website in addition to the Division of Taxation's website.

The provision requiring the Director of the Division of Taxation to testify before a legislative committee if the annual report is not prepared on time was removed (bracketed).

TIMELINE

The number of years for which annual reports are required was reduced from four to two immediately following calendar years after the first year of credit utilization.

An effective date provision was added specifying that the act applies to taxable years and privilege periods beginning on and after January 1 of the year next following the date of enactment.

SCOPE

Section 4, which required the Office of the Food Security Advocate within the Department of Agriculture to maintain a list of approved charitable organizations and promulgate rules for that purpose, was removed from the bill.

Introduced Version → Reprint ACE 10/24/24 1R · 8 edits

MODERATE

The bill was substantially amended by the Assembly Commerce, Economic Development and Agriculture Committee to reframe it as a three-year pilot program rather than a five-year permanent credit. The tax credit rate was increased from 10% to 50% of wholesale value, but a new $5,000 per-period cap and a $100,000 aggregate annual funding limit were added. A provision requiring the Office of the Food Security Advocate to maintain an approved charitable organization list was removed, and the final report must now include recommendations on whether to continue or expand the program.

SCOPE

The bill is now explicitly a 'pilot program' limited to the first three privilege periods (or taxable years) beginning in the year after enactment, replacing the original fixed five-year window from January 1, 2024 through January 1, 2029.

FISCAL

The tax credit rate was increased from 10% to 50% of the wholesale value of donated fruits and vegetables for both the corporation business tax and the gross income tax.

A new per-period cap limits the credit to no more than $5,000 in wholesale value of donations per privilege period or taxable year.

New subsections (Section 1d and Section 2d) cap the aggregate value of all tax credits awarded under both sections at $100,000 in any fiscal year.

REQUIREMENT

The original Section 4, which required the Office of the Food Security Advocate to maintain a list of approved charitable organizations and promulgate rules for inclusion on that list, was struck from the bill.

TIMELINE

The annual reporting requirement was shortened from four years following the first report to two years, consistent with the shorter pilot period.

ENFORCEMENT

A new Section 3e requires the Director of Taxation to include recommendations in the final annual report on whether the tax credits should be continued and whether the credit percentage should be increased if the program is extended.

TECHNICAL

The term 'director' was replaced with 'Director of the Division of Taxation' throughout, U.S.C. citations were added to the charitable organization definition, and the committee before which testimony would be given changed from Agriculture and Food Security to Commerce, Economic Development and Agriculture.

Floor votes

How they voted

No floor votes recorded yet.

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Jan 16, 2025

Committee

Reported out of Assembly Committee with Amendments and Referred to Assembly Appropriations Committee

lower

Oct 24, 2024

Committee

Reported out of Assembly Committee with Amendments and Referred to Assembly Community Development and Women's Affairs Committee

lower

Feb 27, 2024

Introduced

Introduced in the Assembly, Referred to Assembly Commerce, Economic Development and Agriculture Committee

lower

3 primary · 7 co-sponsors