LEGISLATIVE FISCAL ESTIMATE

SENATE, No. 2215

STATE OF NEW JERSEY

222nd LEGISLATURE

 

DATED: JULY 14, 2026

 

 

SUMMARY

 

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.

Type of Impact:

Multi-year State revenue decrease to the General Fund and Property Tax Relief Fund.

Agencies Affected:

Department of the Treasury.

 

 

Office of Legislative Services Estimate

Fiscal Impact

Up to Eight Years After Enactment

 

Aggregate State Revenue Decrease

Up to $300,000

 

 

·         The Office of Legislative Services (OLS) estimates that this bill may result in a State revenue reduction of up to $300,000 over a period of up to eight years, associated with the provision of tax credits to commercial farm operators who donate certain fruits and vegetables. This pilot program would run for three years, beginning on January 1 of the year following the bill's enactment, and unused tax credits could be carried forward for up to five taxable periods.

 

 

BILL DESCRIPTION

 

      This bill creates a pilot program that provides a credit against the corporation business tax and the gross income tax for the value of certain donations of fruits and vegetables that are made to charitable organizations by commercial farm operators over a three-year period beginning January 1 of the year following the bill’s enactment.  Unused tax credits could be carried forward for the earliest available use during the next five taxable years or privilege periods following the taxable year or privilege period for which the credits were allowed.

      Under the bill, commercial farm operators who make donations of fruits or vegetables fit for human consumption to a charitable organization located in this State would be allowed to claim a credit that can be used to reduce the commercial farm operator's tax liability.  The credit would be equal to 50 percent of the wholesale value for the fruits or vegetables donated to the charitable organization during the tax period of the donation, but not to exceed $5,000, as determined using a quantity-weighted average of comparable wholesale sales of similar fruits or vegetables made by the commercial farm operator during the month of the donation or, if no comparable sales are made, the overall average price paid for similar fruits or vegetables at the nearest terminal market during the month of the donation.  The bill would require commercial farm operators claiming the credit to obtain a written statement from the charitable organization to verify each donation of fruits or vegetables.  Upon approval of the written statement, the Department of Agriculture would 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.  The aggregate value of tax credit amounts awarded under the pilot program would be capped at $100,000 in any fiscal year.

      The Department of Agriculture, in consultation with the Division of Taxation in the Department of the Treasury, would be required to prepare an annual report on the utilization of the credits provided by the bill for each year of the three-year pilot program period.  The final annual report would include recommendations on whether the credit program should be continued and if the credit percentage should be increased.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS estimates that the bill may reduce State revenues by up to $300,000 over a period of up to eight years, reflecting the bill’s $100,000 annual aggregate cap on tax credits awarded in each fiscal year of the three-year pilot program.  The OLS assumes a range of producer costs, noting that producer behavior can vary widely and that there does not appear to be publicly available information regarding the exact value of fruits and vegetables produced and donated in New Jersey.  For purposes of estimating potential revenue losses to the State resulting from the provisions of the bill, the OLS makes certain assumptions concerning the behavior of market participants.  With respect to the percentage of fruits and vegetables produced in New Jersey that will be donated and utilize the tax credit program, the OLS assumes that the behavior of market participants may be similar to when California enacted a similar law.

      Based on those assumptions and the ensuing calculations, the OLS estimates that the issuance of tax credits may be limited by the annual aggregate cap of $100,000 during each fiscal year in which the pilot program is operated.  The OLS notes that tax credits under the bill may be carried forward up to five taxable years or privilege periods following the taxable year or privilege period for which the credit is allowed.  Consequently, the OLS anticipates that the bill may result in an aggregate State revenue decrease of up to $300,000 over the period in which these tax credits could be claimed.

 

 

Section:

Revenue, Finance, and Appropriations

Analyst:

Patrick Walsh

Associate 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.).