LEGISLATIVE FISCAL ESTIMATE
SENATE, No. 2386
STATE OF NEW JERSEY
221st LEGISLATURE
DATED: DECEMBER 10, 2024
SUMMARY
|
Synopsis: |
Provides gross income tax credit to active members of volunteer emergency service organizations for use of personal motor vehicle in the performance of active duty. |
|
Type of Impact: |
Annual loss of State revenue to the Property Tax Relief Fund. |
|
Agencies Affected: |
Department of the Treasury. |
|
Fiscal Impact |
FY 2026 and Each FY Thereafter |
|
Annual State Revenue Loss |
Approximately $11 million |
· The Office of Legislative Services (OLS) estimates that this bill will reduce revenues dedicated to the Property Tax Relief Fund by approximately $11 million annually beginning in FY 2026.
· For the purposes of this analysis, the OLS assumes that approximately 66 percent of active volunteers will claim the tax credit and that these persons will drive an average of 10 miles per week in the performance of their duties. Based on these assumptions, the OLS estimates that approximately 47,000 active volunteers would receive an average tax credit of $350 per year.
BILL DESCRIPTION
This bill establishes a refundable gross income tax credit to provide reimbursement to active members of volunteer fire departments and first aid squads for the use of their personal vehicles in the performance of active duty. The credit amount is determined by multiplying the Internal Revenue Services’ standard business mileage rate by the number of miles the taxpayer traveled using their personal vehicle for active duty in the tax year. The maximum credit is $500 per individual taxpayer or $1,000 for married individuals filing jointly if both spouses qualify.
To be eligible, the taxpayer must have been an unpaid member in good standing of the volunteer organization and completed “qualifying service” during the tax year. Qualifying service is defined based on participation thresholds for alarms and calls, meetings, training, and other duties.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS estimates that this bill will reduce annual State revenues dedicated to the Property Tax Relief Fund by roughly $11 million attributable to the provision of tax credits to members of volunteer fire departments and first aid squads for the use of their personal vehicles in the performance of active duty.
The Division of Fire Safety in the Department of Community Affairs reported in June 2023 that there were 35,289 active firefighters in New Jersey. Of these, 7,877 were career firefighters while 27,412 were volunteers who would qualify for the tax credit provided under the bill. In addition, the Department of Health reports that there are 26,000 Emergency Medical Technicians in the State. Assuming that 75 percent of these technicians are volunteers, the OLS estimates that about 47,000 individuals in total would qualify for the new tax credit.
The OLS notes that information concerning the actual number of miles driven by volunteer firefighters and first aid squad members in the performance of active duty is not publicly available. However, assuming that two-thirds of eligible firefighters and first aid squad members are able to claim the credit, and assuming that these persons drive an average of 10 miles per week in the performance of active duty, equating to an average credit amount of nearly $350 when reimbursed at the current standard mileage rate of $0.67, the OLS estimates that the bill would result in annual State revenue losses of roughly $11 million.
|
Section: |
|
|
Analyst: |
Assistant Fiscal Analyst |
|
Approved: |
Thomas Koenig Legislative Budget and Finance Officer |
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).