N.J. Admin. Code § 8:32-6.2

Current through Register Vol. 56, No. 24, December 18, 2024

Section 8:32-6.2 - Gross income tax credit for donor in taxable year

(a) For taxable years beginning on or after July 7, 2018, a taxpayer that is a donor to an approved drug donation program shall be allowed a credit against the tax otherwise due pursuant to the New Jersey Gross Income Tax Act, N.J.S.A. 54A:1-1 et seq., in an amount equal to the sum of: the cost to the taxpayer of the over-the-counter drugs, prescription drugs, and administration supplies as determined pursuant to 26 U.S.C. § 170(e)(3)(A); and the verifiable cost to the taxpayer to make the donation of the over-the-counter drugs, prescription drugs, and administration supplies to a redistributor during the taxable year in accordance with a drug donation program established pursuant to the provisions at N.J.S.A. 24:6M-1 et seq., provided that the:

1. Donor paid for, owned, or was responsible for the over-the-counter drugs, prescription drugs, or administration supplies;

2. Over-the-counter drugs, prescription drugs, or administration supplies were donated to, and accepted by, a redistributor in accordance with the provisions at N.J.S.A. 24:6M-1 et seq.; and

3. Redistributor, which processed the donated drug, complies with all recordkeeping requirements for non-saleable returns to a returns processor pursuant to Federal law.

(b) The amount of the credit applied pursuant to 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 pursuant to this section that 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 20 taxable years immediately following the taxable year for which the credit is allowed. The costs of the over-the-counter drugs, prescription drugs, and administration supplies, and the costs incurred in making the donation to a redistributor, 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.

1. A business entity that is classified as a partnership for Federal income tax purposes shall not be allowed a credit directly, pursuant to the gross income tax, but the amount of credit of a taxpayer in respect of a distributive share of partnership income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer's taxable year. A New Jersey S Corporation shall not be allowed a credit directly pursuant to the gross income tax, but the amount of credit of a taxpayer in respect of a pro rata share of S Corporation income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the New Jersey S Corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro rata share of S Corporation income of the New Jersey S Corporation for its privilege period ending within or with the taxpayer's taxable year.

(c) The donor shall apply for the credit by sending a copy of their receipt (see N.J.A.C. 8:32-4.1(p)) and tax return to:

New Jersey Division of Taxation

Gross Income Tax Audit Branch

PO Box 288

Trenton, NJ 08695-0288

Attention: Drug Donation Program Tax Credit

(d) The taxpayer's use of the tax credit shall be limited pursuant to N.J.A.C. 8:32-6.2(a) or (b), as applicable.

N.J. Admin. Code § 8:32-6.2

Adopted by 56 N.J.R. 1793(a), effective 9/3/2024