Sales tax commission turns thumbs down on several proposals

TRENTON – The Sales and Tax Review Commission on Wednesday voted to not recommend several bills for further review.

They include:

* A3516, a bill that would provide sales and use tax rebates for purchases made by, or on behalf of, individuals and small businesses affected by natural disasters.  

Commission members said today that while the idea may be well intended, the bill is written too broadly, and they added that insurance carried by the businesses could already provide some of the benefits the bill attempts to seek with exemptions.

Member Susan Feeney wondered why construction equipment would be exempt from the sales tax, given that not all the equipment used may be Sandy-related or for other natural disaster debris removal purposes. She feared the bill could create “a nightmare from an administrative and fraud point of view.”

The bill is sponsored by Assembly members Wayne DeAngelo, (D-14), of Hamilton and Connie Wagner, (D-38), of Paramus.

*A3545 – A bill that would have temporarily eliminated the sales tax imposed on prepared food and beverages bought in New Jersey restaurants from Jan. 1 to Feb. 15, 2013. The bill states that “New Jersey’s restaurant industry took a massive hit during Superstorm Sandy as many restaurants were unable to open due to storm damage and loss of electricity.” It also states that the “restaurants helped to feed their neighbors, many of whom were without power or a means to pay.”

Steve Finkel was one of many commission members who could not recommend the bill, saying its “time has come and gone.”

“It’s time of usefulness has passed,” he said.

*A3913 – A bill amending the Rural Electric Cooperative Act that would provide an exemption from certain taxes identical to that which is afforded to municipal electric systems. 

Jim Siglin, president of the Sussex Rural Electric Cooperative, supported the bill, saying the state does not have a statute preventing electric cooperatives from being subject to customers of the bigger utility companies.

He said some 13,000 customers in Sussex County and other areas who are served by Sussex electric company will see their electric rates go down.

However, Feeney was concerned the bill may come across as an endorsement of special legislation, which might be “unconstitutional.”

Commission vice chair Deborah R. Bierbaum wondered what was the policy rationale for the sales tax exemption. Siglin said it’s simply to bring it in line with the same benefits small municipal utility authorities currently enjoy.

But Finkel said he wasn’t particularly concerned about that, adding that if it is deemed unconstitutional special legislation, it will quickly be identified.

“It doesn’t trouble me,” he said.

Nonetheless, the members voted to not recommend it.

*A3934 – A bill that would require common areas and other areas of assisted living facilities to be generator-ready and provide related tax relief to buy and install such equipment.

Feeney argued the businesses are for-profit and should be able to do it without government assistance. She described assisted living facilities as “a fairly lucrative business.”

The bill, sponsored by Assemblyman Joe Cryan, was not recommended by the commission.


Sales tax commission turns thumbs down on several proposals