Unused gift cards, user fees, tax relief, energy tax receipts all before Budget Committee

TRENTON – A Senate committee is scheduled to deal with a contentious matter Thursday: what happens to unused gift cards.

A 2010 law that allows the state to claim any unspent funds of gift cards after two years has turned into a heated debate that involves the state budget and the practices of businesses.

This is just one of several key bills that the Budget and Appropriations Committee has on its slate for that day, including ones dealing with property tax relief, energy tax receipts, and town-imposed user fees.

Regarding the 2010 gift card law, the law’s opponents claim it’s just another way for the state to funnel money into the general fund in lieu of raising taxes.

The state, however, said it is not right that consumers’ unspent monies should be grabbed by the card issuers, and that such funds should reside in the hands of the state for safekeeping until a consumer claims them.

The law has led a few retailers, most noticeably American Express, to pull gift cards from New Jersey. Chief among their complaints is a provision in the law requiring them to collect the ZIP codes of purchasers, something the N.J. Retail Merchants Association says no other state mandates.

So Sen. Paul Sarlo, (D-36), Wood-Ridge, has introduced S1928, which will be before the committee he chairs, Budget and Appropriations.

The bill cites the problems of retailers considering pulling gift card business from the state, as well as the uncertainty of lengthy litigation.

Sarlo’s legislation would remove gift cards from the ranks of property that is subject to the escheat laws, as well as eradicating the mandate over collecting information about purchasers.

Among other things, the bill would grant the Treasury Department emergency regulatory authority to implement the bill.

Other bills scheduled to be heard by the Budget panel on Thursday:

S1914: This would address the situation in which towns are circumventing the 2 percent tax cap by imposing user fees on residents.  The bill sponsored by Sen. President Steve Sweeney would mandate that such user fees have to be included within the 2 percent cap calculations.

S1900: This would restore the Energy Tax Receipts Fund to municipalities. Mayors have been complaining that the state is taking monies that rightfully belong with the municipalities, although there is a court ruling granting the state access to such monies.

S1121: This bill addresses an inequity regarding the law used to set employers’ tax rates under unemployment insurance. Employers with positive reserve ratios are subsidizing those with a negative ratio, a burden that is hampering efforts to restore unemployment insurance fund solvency.

The Office of Legislative Services has estimated that this bill would generate an additional $26.8 million in fiscal year 2013 for the trust fund, an additional $27.6 million in fiscal year 2014, and an additional $28.4 million in fiscal year 2015.

S10: This property tax relief bill sponsored by Sweeney would establish a Direct Property Tax Relief Program by providing a credit under the income tax and increasing the gross income tax credit for homestead property taxes.

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Unused gift cards, user fees, tax relief, energy tax receipts all before Budget Committee