New Jersey § 52:27bbb-53

§ 52:27bbb-53.

As used in this section and section 55 of P.L.2002, c. 43 ( C.52:27BBB-54 ): a. “ Business facility ” means any factory, mill, plant, refinery, warehouse, building, complex of buildings

or structural components of buildings, and all machinery, equipment and personal property

located within a qualified municipality, used in connection with the operation of

the business of a corporation that is subject to the tax imposed pursuant to section

5 of P.L.1945, c. 162 ( C.54:10A-5 ) or the tax imposed pursuant to sections 2 and 3 of P.L.1945, c. 132 ( C.54:18A-2 and 54:18A-3 ), section 1 of P.L.1950, c. 231 ( C.17:32-15 ) and N.J.S.17B:23-5 , and all facility preparation and start-up costs of the taxpayer for the business

facility which it capitalizes for federal income tax purposes. b. “ Business relocation or business expansion property ” means improvements to real property and tangible personal property, but only if

that improvement or personal property is constructed or purchased and placed in service

or use by the taxpayer, for use as a component part of a new business facility or expanded business facility located in a qualified municipality. (1) Business relocation or business expansion property shall include only: (a) improvements to real property placed in service or use as a business facility

by the taxpayer on or after the notification of the Governor by the commissioner pursuant

to section 4 of P.L.2002, c. 43 ( C.52:27BBB-4 ) that the municipality in which the property is situated fulfills the definition

of a qualified municipality; (b) tangible personal property placed in service or use by the taxpayer on or after

the notification of the Governor by the commissioner pursuant to section 4 of P.L.2002, c. 43 ( C.52:27BBB-4 ) that the municipality in which the property is situated fulfills the definition

of a qualified municipality, with respect to which depreciation, or amortization in

lieu of depreciation, is allowable for federal income tax purposes and which has a remaining recovery period of three or more years at the time the

property is placed in service or use in a qualified municipality; or (c) tangible personal property owned and used by the taxpayer at a business location

outside a qualified municipality which is moved into a qualified municipality on or

after the notification of the Governor by the commissioner pursuant to section 4 of P.L.2002, c. 43 ( C.52:27BBB-4 ) that the municipality in which the property is situated fulfills the definition

of a qualified municipality, for use as a component part of a new or expanded business

facility located in the qualified municipality; provided that the property is depreciable

or amortizable personal property for income tax purposes, and has a remaining recovery

period of three or more years at the time the property is placed in service or use

in a qualified municipality. (2) Property purchased for business relocation or expansion shall not include: (a) repair costs, including materials used in the repair, unless for federal income

tax purposes, the cost of the repair must be capitalized and not expensed; (b) airplanes; (c) property which is primarily used outside a qualified municipality with that use

being determined based upon the amount of time the property is actually used both

within and without the qualified municipality; (d) property which is acquired incident to the purchase of the stock or assets of

the seller. (3) Property shall be deemed to have been purchased prior to a specified date only

if: (a) the physical construction, reconstruction or erection of the property was begun

prior to the specified date, or such property was constructed, reconstructed, erected

or acquired pursuant to a written contract as existing and binding on the purchase

prior to the specified date; or (b) the machinery or equipment was owned by the taxpayer prior to the specified date,

or was acquired by the taxpayer pursuant to a binding purchase contract which was

in effect prior to the specified date. c. “ Business relocation or business expansion ” means capital investment in a new or expanded business facility in a qualified municipality. d. “ Controlled group ” means one or more chains of corporations connected through stock ownership with

a common parent corporation if stock possessing at least 50% of the voting power of

all classes of stock of each of the corporations is owned directly or indirectly by

one or more of the corporations; and the common parent owns directly stock possessing

at least 50% of the voting power of all classes of stock of at least one of the other

corporations. e. “ Director ” means the Director of the Division of Taxation in the Department of the Treasury. f. “ Expanded business facility ” means any business facility, other than a new business facility, resulting from

acquisition, construction, reconstruction, installation or erection of improvements

or additions to existing property if such improvements or additions are purchased

on or after the effective date of rehabilitation and economic recovery. g. “ Incentive payment ” means: the amount of tax owed by a taxpayer for a privilege period or reporting period , as computed pursuant to section 5 of P.L.1945, c. 162 ( C.54:10A-5 ) or section 7 of P.L. 2002, c.40 ( C.54:10A-5a ), or sections 2 and 3 of P.L.1945, c. 132 ( C.54:18A-2 and 54:18A-3 ), or section 1 of P.L.1950, c. 231 ( C.17:32-15 ) and N.J.S.17B:23-5 , multiplied for each privilege period or reporting period by a fraction, the numerator of which is the average value of the taxpayer's business

relocation or business expansion property within a qualified municipality during the

period covered by its report, and the denominator of which is the average value of

all the taxpayer's real and tangible personal property , excluding improvements made after the date of a taxpayer's first acquisition of

business relocation or business expansion property in the qualified municipality to

business facilities in existence on that date outside of the qualified municipality, in New Jersey during such period which result is multiplied by 96 percent; provided,

however, that for the purpose of determining average value, the provisions with respect

to depreciation as set forth in subparagraph (F) of paragraph (2) of subsection (k)

of section 4 of P.L.1945, c. 162 ( C.54:10A-4 ) shall be taken into account for arriving at such value whether the corporation is subject to the tax imposed pursuant to section 5 of P.L.1945,

c. 162 ( C.54:10A-5 ), the tax imposed pursuant to sections 2 and 3 of P.L.1945, c. 132 ( C.54:18A-2 and 54:18A-3 ), the tax imposed pursuant to section 1 of P.L.1950, c. 231 ( C.17:32-15 ) or the tax imposed pursuant to N.J.S.17B:23-5 ; and provided further that the value of a leasehold interest in realty located within

a qualified municipality shall be based on no less than the fair market value of its

rent; and provided further that incentive payments shall be made for a period not to exceed

10 years, commencing on the date of a taxpayer's first acquisition of business relocation

or business expansion property in the qualified municipality following the notification

of the Governor by the commissioner pursuant to section 4 of P.L.2002, c. 43 ( C.52:27BBB-4 ) that the municipality in which the property is situated fulfills the definition

of a qualified municipality. h. “ New business facility ” means a business facility which: (1) is employed by a taxpayer in the conduct of a business which is or will be taxable

under P.L.1945, c. 162 ( C.54:10A-1 et seq. ) or pursuant to sections 2 and 3 of P.L.1945, c. 132 ( C.54:18A-2 and 54:18A-3 ), section 1 of P.L.1950, c. 231 ( C.17:32-15 ) or N.J.S.17B:23-5 . A business facility shall not be considered a new business facility in the hands

of a taxpayer if the taxpayer's only activity with respect to the facility is to lease

it to another person; (2) is purchased by a taxpayer and is placed in service or use on or after the effective

date of rehabilitation and economic recovery; (3) was not purchased by a taxpayer from a related person; and (4) was not in service or use during the 90-day period immediately prior to transfer

of the title to the facility. i. “ Partnership ” means a syndicate, group, pool, joint venture or other unincorporated organization

through or by means of which any business, financial operation or venture is carried

on, and which is not a trust or estate, a corporation or a sole proprietorship. The term “ partner ” includes a member in such a syndicate, group, pool, joint venture or organization. j. “ Purchase ” means, with respect to the determination of whether business relocation or business

expansion property was purchased, any acquisition of property, including an acquisition

pursuant to a lease, and an acquisition pursuant to a lease under which the lessee or affiliates of the

lessee are the primary occupants under a lease of ten years or more, but only if: (1) the property is not acquired from a person whose relationship to the person acquiring

it would result in the disallowance of deductions under section 267 or subsection (b) of section 707 of the federal Internal Revenue Code of 1986 , 26 U.S.C.s.267 or s.707; (2) the property is not acquired by one member of a controlled group from another

member of the same controlled group; and (3) the basis of the property for federal income tax purposes, in the hands of the

person acquiring it, is not determined: (a) in whole or in part by reference to the federal adjusted basis of such property

in the hands of the person from whom it was acquired; or (b) under subsection (e) of section 1014 of the federal Internal Revenue Code of 1986 , 26 U.S.C. s.1014 . k. “ Related person ” means: (1) a corporation, partnership, association or trust controlled by the taxpayer; (2) an individual, corporation, partnership, association or trust that is in control

of the taxpayer; (3) a corporation, partnership, association or trust controlled by an individual,

corporation, partnership, association or trust that is in control of the taxpayer;

or (4) a member of the same controlled group as the taxpayer.