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.

A2382

ASSEMBLY, No. 2382

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman WILLIAM F. MOEN, JR.

District 5 (Camden and Gloucester)

Assemblywoman HEATHER SIMMONS

District 3 (Cumberland, Gloucester and Salem)

Assemblyman DAVID BAILEY, JR.

District 3 (Cumberland, Gloucester and Salem)

Co-Sponsored by:

Assemblyman Sauickie, Assemblywomen Peterpaul, Flynn,
Fantasia, Assemblyman Simonsen and Assemblywoman Reynolds-Jackson

SYNOPSIS

���� 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.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act

creating a pilot program to provide credits against the corporation business
tax and the gross income tax for the value of certain fruit and vegetable
donations made by commercial farm operators and supplementing P.L.1945, c.162
(C.54:10A-1 et seq.) and Title 54A of the New Jersey Statutes.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

����� 1.�� a.�
For the first three privilege periods beginning on or after January 1 of the
year next following the date of enactment of P.L. ,
c. (C. )
(pending before the Legislature as this bill), as part of a pilot program, a
commercial farm operator that makes a donation of fruits or vegetables fit for
human consumption to a charitable organization located in this State shall be
allowed credit against the corporation business tax imposed pursuant to section
5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to 50 percent of the
wholesale value of the fruits or vegetables that are donated to the charitable
organization, but not to exceed the value of $5,000 during each privilege
period of donation.

����� b.�� In
order to claim the credit allowed pursuant to this section, a commercial farm
operator shall obtain a written statement from the charitable organization
substantiating each donation of fruits or vegetables made during the privilege
period for which the credit is allowed.� At the time a donation is made, the
commercial farm operator shall provide to the charitable organization the
wholesale value of the donated fruits or vegetables and information identifying
the location where the fruits or vegetables were grown.� The charitable
organization, upon receipt of the donated fruits or vegetables, shall issue to
the commercial farm operator making the donation a written statement, signed
and dated by an individual authorized to accept the donation on behalf of the
charitable organization, that contains the variety, grade, and quantity of the
donated fruits or vegetables, the name and address of the commercial farm
operator making the donation, the name and address of the charitable
organization, and, as provided by the commercial farm operator, the wholesale
value of and the location where the donated fruits or vegetables were grown.

����� c.�� During
each month of the pilot program, the Secretary of Agriculture shall establish
and publish the wholesale value of fruits or vegetables for purposes of
calculating the tax credit allowed pursuant to this section. The Secretary of
Agriculture shall prepare a written statement form for use by individuals
authorized to accept donations on behalf of the charitable organization.

����� d.�� In
order to receive the tax credit allowed pursuant to this section, a commercial
farm operator shall submit to the Department of Agriculture the written
statement received from a charitable organization pursuant to subsection b. of
this section. Upon approval of the written statement, the Department of
Agriculture shall notify the Director of the Division of Taxation as to the
eligibility of the commercial farm operator for a tax credit in the amount
approved by the department.

����� e.�� The
order of priority of the application of the credit allowed pursuant to this
section and any other credits allowed by law shall be as prescribed by the Director
of the Division of Taxation.� The amount of the credit applied under this
section against the corporation business tax liability of the taxpayer for a
privilege period, together with any other credits allowed by law, shall not
exceed 50 percent of the tax liability otherwise due and shall not reduce the
tax liability 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 allowable under this section which cannot be used to reduce the
taxpayer�s corporation business tax liability for the privilege period due to
the limitations of this section may be carried forward and applied to the
earliest available use within the five privilege periods immediately following
the privilege period for which the credit is allowed.� The wholesale value of
any donated fruits or vegetables that are included in the calculation of the
credit allowed pursuant to this section shall not be allowed as an amount
calculated or claimed pursuant to any other deduction or credit allowed under
the corporation business tax.

����� f.��� The
aggregate value of tax credit amounts awarded pursuant to sections 1 and 2 of
P.L. ,
c. (C. )
(pending before the Legislature as this bill) shall not exceed $100,000 in any
fiscal year.

����� g.�� As
used in this section:

����� �Charitable
organization� includes any organization that is incorporated under the
provisions of Title 15 or Title 16 of the Revised Statutes or Title 15A of the
New Jersey Statutes; any organization that is exempt from taxation under
section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. s.501(c)(3); any
entity to which a charitable contribution as defined under subsection (c) of
section 170 of the Internal Revenue Code, 26 U.S.C. s.170(c), is deductible
under section 170; and any food bank as defined in section 2 of P.L.1982, c.178
(C.24:4A-2).

����� �Commercial
farm� means �commercial farm� as that term is defined by section 3 of P.L.1983,
c.31 (C.4:1C-3).

����� �Commercial
farm operator� means the taxpayer primarily responsible for the on-site,
day-to-day operation of a commercial farm, at which farm fruits or vegetables
are planted, managed, and harvested for donation.

����� �Wholesale
value� means:

����� the
value calculated by using a quantity-weighted average wholesale sales price of
the donated fruits or vegetables as determined based on the wholesale sales
price paid for each wholesale sale of fruits or vegetables made by the
commercial farm operator during the calendar month of the commercial farm
operator�s donation that are the same variety and grade as the donated fruits
or vegetables and the respective weight, volume, or other standard unit of
measure of each wholesale sale; or

����� if
no wholesale sales of fruits or vegetables that are the same variety and grade
as the donated fruits and vegetables are made by the commercial farm operator
during the calendar month of the commercial farm operator�s donation, the
wholesale value shall be equal to the overall average price paid for fruits or
vegetables that are the same variety and grade as the donated fruits or
vegetables at the nearest terminal market located the fewest miles from the
commercial farm operator�s commercial farm during the calendar month of the
commercial farm operator�s donation as determined using the Fruit and Vegetable
Custom Average Tool maintained by the United States Department of Agriculture�s
Agricultural Marketing Service, or another similar source of average price data
as may be prescribed by the director.

����� 2.�� a.�
For the first three taxable years beginning on or after January 1 of the year
next following the date of enactment of P.L. ,
c. (C. )
(pending before the Legislature as this bill), as part of a pilot program, a
commercial farm operator that makes a donation of fruits or vegetables fit for
human consumption to a charitable organization located in this State shall be
allowed credit against the tax otherwise due under the �New Jersey Gross Income
Tax Act,� N.J.S.54A:1-1 et seq., in an amount equal to 50 percent of the
wholesale value of the fruits or vegetables that are donated to the charitable
organization, but not to exceed the value of $5,000 during each taxable year of
donation.

����� b.�� In
order to claim the credit allowed pursuant to this section, a commercial farm
operator shall obtain a written statement from the charitable organization
substantiating each donation of fruits or vegetables made during the taxable
year for which the credit is allowed.� At the time a donation is made, the
commercial farm operator shall provide to the charitable organization the
wholesale value of the donated fruits or vegetables and information identifying
the location where the fruits or vegetables were grown.� The charitable
organization, upon receipt of the donated fruits or vegetables, shall issue to
the commercial farm operator making the donation a written statement, signed
and dated by an individual authorized to accept the donation on behalf of the
charitable organization, that contains the variety, grade, and quantity of the
donated fruits or vegetables, the name and address of the commercial farm
operator making the donation, the name and address of the charitable
organization, and, as provided by the commercial farm operator, the wholesale
value of and the location where the donated fruits or vegetables were grown.

����� c.�� During
each month of the pilot program, the Secretary of Agriculture shall establish
and publish the wholesale value of fruits or vegetables for purposes of
calculating the tax credit allowed pursuant to this section. The Secretary of
Agriculture shall prepare a written statement form for use by individuals
authorized to accept donations on behalf of the charitable organization.

����� d.�� In
order to claim the tax credit allowed pursuant to this section, a commercial
farm operator shall submit to the Department of Agriculture the written
statement received from a charitable organization pursuant to subsection b. of
this section. Upon approval of the written statement, the Department of
Agriculture shall notify the

Director of the Division of Taxation as to
the eligibility of the commercial farm operator for a tax credit in the amount
approved by the department.

����� e.�� (1)�
The order of priority of the application of the credit allowed pursuant to this
section and any other credits allowed by law shall be as prescribed by the Director
of the Division of Taxation.� The amount of the credit applied under this
section against the gross income tax liability of the taxpayer for a taxable
year, together with any other credits allowed by law, shall not exceed 50
percent of the tax liability otherwise due.� The amount of the credit allowable
under this section which cannot be used to reduce the taxpayer�s gross income
tax liability for the taxable year due to the limitations of this section may
be carried forward and applied to the earliest available use within the five
taxable years immediately following the taxable year for which the credit is
allowed.� The wholesale value of any donated fruits or vegetables that are
included in the calculation of the credit allowed pursuant to this section
shall not be allowed as an amount calculated or claimed pursuant to any other
deduction or credit allowed under the gross income tax.

����� (2)� A
business entity classified as a partnership for federal income tax purposes
shall not be allowed a credit directly under the gross income tax, but a
taxpayer shall be allowed a credit in proportion to the taxpayer�s distributive
share of the business entity�s donation of fruits or vegetables during the
taxable year.� A New Jersey S corporation shall not be allowed a credit
directly under the gross income tax, but a taxpayer shareholder shall be
allowed a credit in proportion to the taxpayer�s distributive share of the New
Jersey S corporation�s donation of fruits or vegetables during the taxable
year.

����� f.��� The
aggregate value of tax credit amounts awarded pursuant to sections 1 and 2 of
P.L. ,
c. (C. and
C.������� ) (pending before the Legislature as this bill) shall not exceed
$100,000 in any fiscal year.

����� g.�� As
used in this section:

����� �Charitable
organization� includes any organization that is incorporated under the
provisions of Title 15 or Title 16 of the Revised Statutes or Title 15A of the
New Jersey Statutes; any organization that is exempt from taxation under
section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. s.501(c)(3); any
entity to which a charitable contribution as defined under subsection (c) of
section 170 of the Internal Revenue Code, 26 U.S.C. s.170(c), is deductible
under section 170; and any food bank as defined in section 2 of P.L.1982, c.178
(C.24:4A-2).

����� �Commercial
farm� means �commercial farm� as that term is defined by section 3 of P.L.1983,
c.31 (C.4:1C-3).

����� �Commercial
farm operator� means the taxpayer primarily responsible for the on-site,
day-to-day operation of a commercial farm, at which farm fruits or vegetables
are planted, managed, and harvested for donation.

����� �Wholesale
value� means:

����� the
value calculated by using quantity-weighted average wholesale sales price of
the donated fruits or vegetables as determined based on the wholesale sales
price paid for each wholesale sale of fruits or vegetables made by the
commercial farm operator during the calendar month of the commercial farm
operator�s donation that are the same variety and grade as the donated fruits
or vegetables and the respective weight, volume, or other standard unit of
measure of each wholesale sale; or

����� if
no wholesale sales of fruits or vegetables that are the same variety and grade
as the donated fruits and vegetables are made by the commercial farm operator
during the calendar month of the commercial farm operator�s donation, the
wholesale value shall be equal to the overall average price paid for fruits or
vegetables that are the same variety and grade as the donated fruits or
vegetables at the nearest terminal market located the fewest miles from the
commercial farm operator�s commercial farm during the calendar month of the
commercial farm operator�s donation as determined using the Fruit and Vegetable
Custom Average Tool maintained by the United States Department of Agriculture�s
Agricultural Marketing Service, or another similar source of average price data
as may be prescribed by the director.

����� 3.�� a.�
The Secretary of Agriculture, in consultation with the Director of the Division
of Taxation in the Department of the Treasury, shall prepare an annual report
regarding the utilization of the tax credits allowed pursuant to sections 1 and
2 of P.L. , c. (C. and C. )
(pending before the Legislature as this bill), on or before December 1 of the
year next following the first year in which the utilization of tax credits is
permitted pursuant to P.L.��� , c.���� (C.������� ) (pending before the Legislature
as this bill) and on or before that date each year thereafter for each of the two
immediately following calendar years.

����� b.�� The
annual report shall be separate and in addition to the report required to be
prepared pursuant to section 1 of P.L.2009, c.189 (C.52:27B-20a), and shall, at
a minimum, describe the following for tax periods that begin in the calendar
year immediately preceding the calendar year in which the report is required to
be prepared:

����� (1)� the
number of taxpayers claiming the tax credits allowed pursuant to sections 1 and
2 of P.L.���� , c.���� (C.������ and C.������� ) (pending before the
Legislature as this bill);

����� (2)� the
total dollar value of tax credits claimed by commercial farm operators;

����� (3)� the
wholesale value of all fruits and vegetables donated to charitable
organizations;

����� (4)� the
counties in which the greatest percentage of donated fruits or vegetables were
grown by commercial farm operators;

����� (5)� the
months in which the greatest percentage of fruits and vegetables were donated
to charitable organizations; and

����� (6)� the
charitable organizations benefiting from the donated fruits and vegetables.

����� c.�� The
annual report shall be submitted to the Governor and the Legislature, pursuant
to section 2 of P.L.1991, c.164 (C.52:14-19.1), and shall be made available to
the public in electronic form through a link prominently displayed on the
official Internet website of the Division of Taxation in the Department of the
Treasury and the Department of Agriculture, within 10 calendar days of the date
the report is required to be prepared.

����� d.�
In addition to the information required pursuant to subsection b. of this
section, the Secretary of Agriculture shall include recommendations within the
final annual report required pursuant to this section on whether:

����� (1)� the
allowance of tax credits pursuant to sections 1 and 2 of
P.L. ,
c. (C. and
C.������� ) (pending before the Legislature as this bill) 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, in the event that the allowance of tax
credits pursuant to P.L. ,
c. (C. )
(pending before the Legislature as this bill) is continued.

����� 4.�
This act shall take effect immediately and apply to taxable years and privilege
periods beginning on and after January 1 of the year next following the date of
enactment.

STATEMENT

����� 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 the Secretary of
Agriculture to prepare a written statement form for use by individuals
authorized to accept donations on behalf of the charitable organization.

����� The bill also requires the Secretary of Agriculture,
in consultation with 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.� In addition to certain requirements for each annual
report required by the bill, the Secretary of Agriculture 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 aggregate value of tax credit amounts awarded
under the bill�s provisions is limited to $100,000 in any fiscal year.