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P.L.1991, c.431 with final retroactive amendments effective August 5, 1992 consolidated, into one more flexible law, the various long term tax exemption laws under which municipalities may agree with private entities to undertake redevelopment projects in return for tax exemptions.

P.L.1991, c.441, effective for the first full tax year commencing after its January 18, 1992 enactment, consolidated the various five-year tax abatement and exemption laws into one, more standardized law to govern all tax abatements and exemption regardless of the type of structure.

Long Term Tax Exemption Law

Prior to 1993, which was the first full year of operation governed by the new Long Term Tax Exemption Law, under the provisions of N.J.S.A.40:55C-40, the “Urban Renewal Corporation and Association Law of 1961,” commonly known as the Fox-Lance Act, a qualified municipality (a municipality with “areas in need of rehabilitation”) could abate from 15 to 20 years the taxes on newly constructed industrial, commercial, cultural, or residential projects of a corporation, with profits in excess of the limited profits returned to the municipality, or from 30 to 35 years for condominium projects. Condominium projects were given 30 to 35 years in order to provide a realistic period for permanent financing. Also, prior to 1993 under the provisions of N.J.S.A.55:16-1 et seq., the “Limited-Dividend Nonprofit Housing Corporation or Association Law,” a qualified municipality could abate for up to 50 years the taxes on newly constructed housing. Further, under N.J.S.A.55:14I-1 et seq., a qualified municipality could abate for up to 50 years the taxes on newly constructed senior housing. Lastly, prior to 1993, under the provisions of N.J.S.A.40:55C-77, the “Urban Renewal Nonprofit Corporation Law of 1965,” basically the same types of properties and projects as the Fox-Lance Act could be abated for 20 to 25 years with all profits being returned to the municipality. In all cases under these property tax exemption laws in-lieu of tax payments were required.

Commencing in 1993 the provisions of N.J.S.A.40A:20-1 et seq. permitted a qualified municipality to abate the taxes on properties and projects in the same way the pre 1993 law did with the following notable exceptions:

A new, flexible in-lieu of tax formula was established with a phasing-in of payments in-lieu of taxes to occur under both the percent of gross rental formula and the percent of total project cost formula.

The formulas for computing payment in-lieu of taxes for both office projects and housing projects were changed. The minimum annual service charge for office buildings was reduced from 15 to 10 percent of the annual gross revenues of the project or units of the project. Municipalities retained the option of computing the payment in-lieu of taxes at no less than 2 percent of the total project cost or total project units cost. For housing projects the annual service charge was changed from a minimum of 15 percent to a maximum of 15 percent of annual gross revenue of the project or from a minimum 2 percent to a maximum 2 percent of the total project cost or total project unit cost.

The payment in-lieu of tax formulas remains basically unchanged for all other types of industrial, commercial or cultural projects.

Five-Year Exemption and Abatement Law

Prior to 1993, which was the first full year of operation under the new Five-Year Exemption and Abatement Law, there were three types of property to which a qualified municipality (a municipality with “areas in need of rehabilitation”) could grant a partial exemption and abatement for a five-year period.

These property types included:

Homeowner improvements (including additions and enlargements) made to one-unit or two-unit residential dwellings that were more than 20 years old. As determined by ordinance the first $4,000, $10,000 or $15,000 of increased value due to improvement on each unit could be exempted from taxation (see N.J.S.A. 54:4-3.72 to 3.79).

Commercial and industrial improvements and construction projects (with less than Read more…

Cars that have been in use for around twenty years readily show their age. From overheating engines, wiggling joints, creaking windows and deteriorating paint, cars become less and less desirable as well as becoming less reliable, as they get older.

As it ages, a car becomes a stronger candidate to become a item for donation to charities. The habit of participating in a car donation drive is supposedly a no-lose strategy for both owners and charities.

Owners who donate their cars are eligible for large tax deductions, while recipient charities generate assets that are not usually received through cash contributions. Charities have quite a few choices on what ways to use the donated vehicle.

The car is often used for transportation for food, or to drive officials to appointments or to run errands. The evolution of car donation drives has a short history. The Washington-based Davis Memorial Foundation conducted the first car donation drive in 1978. The project was started by the organization in order to compete for the small quantity of donations that were available in the US at that time.

Davis Memorial only received five cars during the first year of the program, but that was sufficient to persuade other charities to initiate their own car donation ideas. Shortly thereafter, private fundraising groups came forth and made their services available to charities. The private entities took care of logistics, which happened to be a significant rallying point for charities and they made the programs financially rewarding and simple to carry out.

Charities discovered a fresh source of money and they only needed to cash in on the checks that come each month. The larger charities that conduct their own car donations include the Red Cross, Easter Seals, Mothers Against Drunk Driving, the United Way, Big Brothers/Sisters, and the American Cancer Society.

How much is your car worth?

Many resources on the Internet such as the web sites of the National Automobile Dealers Association and the Kelley Blue Book are very useful in helping owners find the fair market value of their old cars. The tax advantage is determined by the way the car is categorized in terms of its appraisal.

An auto categorized as “low value” brings the owner a tax exemption of $500. Transactions are easily closed, as Read more…

When it comes to the taxation of an offshore company incorporated in Belize there is really only one thing to know and that is an offshore IBC is exempt from all taxes and stamp duty! The structure of a Belize IBC is totally non-restrictive. There are many potential benefits to establishing an International Business Company offshore, but few jurisdictions offer the features and benefits that Belize does. Shareholders and directors can be the same person or corporate entity, there is only one shareholder and director required, they do not need to reside locally in Belize and nominee shareholders and directors can be appointed. The country is committed to remaining 100% attractive in terms of its ability to secure the privacy and wealth management of international companies who choose to incorporate and/or bank offshore in Belize.

If you’re interested in offshore company incorporation, complete our offshore advice form and we will have an adviser contact you to discuss your requirements. The structure of a Belize IBC is totally non-restrictive. There are many potential benefits to establishing an International Business Company offshore, but few jurisdictions offer the features and benefits that Belize does. Shareholders and directors can be the same person or corporate entity, there is only one shareholder and director required, they do not need to reside locally in Belize and nominee shareholders and directors can be appointed. Belize international business companies have many benefits and this article provides an overview of the most relevant and pertinent features.

The names, identities and any information relating to the shareholders and directors of the company are 100% confidential; they never appear on any official document or record and as stated; if this isn’t enough privacy for you then nominee directors and shareholders can be appointed. These business types require special licensing. There are many potential benefits to establishing an International Business Company offshore, but few jurisdictions offer the features and benefits that Belize does. Belize is a democratic, politically and economically stable Central American country – facts which offer potential investors and companies looking for incorporation services the peace of mind required when it comes to their consideration of the jurisdiction. The structure of a Belize IBC is totally non-restrictive.

If you’re interested Read more…

The Joint Legislative Committee on Government Consolidation and Shared Services held its first meeting on 8/806. Senator Robert Smith the Committee’s Co-Chairman said “home rule has lead to New Jersey having the highest property tax burden of any State in the United States”. However, he said that their is no single silver bullet to solve New Jersey’s excessive property tax burden. Nevertheless, the committee is charged with coming up with a legislative action plan to be submitted to the Legislature.

Senator Smith believes New Jersey should look to states that rely on county school districts, instead of the local administration in New Jersey that has produced more school districts than towns. He called it the most inefficient system in the country. In an August 9, 2006 Asbury Park Press article called “Sharing Services May Not Pay Off”a New Jersey School Board Association spokesman said the current law provides that if school districts merge, the larger district’s union contract is to be the one used — even if its salaries are more generous and there fore costlier to taxpayers.

Testimony before the committee reported that the State has 1,389 different entities that can levy property taxes, including municipalities school districts and fire districts. What struck me after listening to the testimony given to the committee about the history of consolidation in New Jersey is the disjointed, fragmented, locally driven parochial measures that have dragged the State into its current State of law and practice regulating consolidation.

Ultimately, I believe there is not enough political courage, legislators realize that forcing consolidation will likely cause them to lose their job, This is especially true if the State uses the stick approach and forces consolidations that at best “over time” saves only 10% to 20% in costs and therefore reduces property taxes by a like amount. What is worse is that consolidation in some cases could wind up costing more!

I am waiting for the discussion to commence on which local municipal services are essential local government functions and at what cost. Further, if they do not belong at the municipal government level then which government level should fund them? I believe New Jersey will shift certain local government and school functions to a higher level of government in the State and establish appropriate cost and service levels. District schools consolidated at the county level, the prosecutor’s office, county jails, county school superintendents, moved to the State level. But, this represents a very daunting task for a legislative committee to assemble into a legislative action plan by November 15, 2006.

Why do New Jersey residents cling to the concept of home rule? It is because they like their local school whose teachers and principal they know. They like knowing the people who serve on their local planning and zoning boards, they like their local recreation programs and fear that under consolidation they might be spirited off to some other venue if local control was lost. Some residents in small towns have built up a report with their local public works staff to get their roads plowed first … so that their husband can get to work on the midnight shift. Other like the patrol car coming by once a day, or the fact that the local police are the first to arrive when there is the need to call an ambulance.

These are the items that build character into a community that people want to retain. I believe that generally people do not care who the business administrator is, or who the assessor is, what office handles the collection of taxes (but lets not have to drive to the county seat to pay our quarterly property tax bill). I do not believe people generally care about whether their town has civil service or not. I would venture to guess most residents do not even know which departments in their town are governed by civil service rules. Home rule has its virtues but at what cost will property taxpayers say the hell with home rule. At some point coercion to consolidate is not coercion if it is the will of the people said Senator Smith of the committee. Has the property tax burden on home owners in New Jersey reached the breaking point so that New Jersey legislators and the governor will favor the big stick approach of mandatory consolidation?

Basically, property taxpayers want services they can afford, service levels that will maintain the character of their towns that support the values incorporated in their homes which is their largest source of wealth in most cases. People also want Read more…

According to lawyers, millions of small businesses and low-income taxpayers will be excluded from a Bush administration tax refund program.

A class-action lawsuit has been filed by lawyers in regards to a Treasury Department plan in which the public stopped paying a 3% federal excise tax on long-distance phone calls as of July 31. The tax collected by phone service providers was levied without congressional authorization.

Taxpayers have been told that they can get the past three years of excise tax payments back by asking for the money on their 2006 tax returns. The Treasury Department estimates that $13 billion will be refunded to taxpayers.

Those that do not file tax returns will be left out of the tax rebate program. As many as 10 million households are estimated to be left out, according to a study by the nonprofit Center on Budget and Policy Priorities.

“Since I do not file a tax return, it does not seem right that I am expected to fill out a tax return because of what someone else took from me illegally,” said James Gillis, 78, in a declaration in the lawsuit.

The IRS said that it is developing a “very simple, straightforward form” for low-income people to file in order to recieve the refund.

“We recognize there are many people who have no filing requirements and we want to Read more…

A major overhaul of US pension legislation passed the Senate last week and has been sent to the President for final approval.

The bill was approved in a 93-5 vote last Thursday in the Senate. It addresses the estimated $630 billion in underfunding in pension plans, which affects approximately 45 million American workers and retirees.

The bill is the first major change to pension law in 30 years.

The bill requires companies to fund 100% of their projected pension obligations, an increase fom the current requirement of 90%. Companies that do not meet the obligation will be prohibeted from increasing employee benefits and must make accelerated payments to catch-up.

The bill will add more information to disclosures given to workers and retirees, which give the status of their pension plan. It will also restrict golden parachute executive compensation arrangements.

The bill includes $60 billion in tax breaks that permanently extend pension and savings tax incentives that were included in the 2001 tax bill. The package includes increased contribution limits to IRAs, 401(k)s and a permanent saver’s credit for lower income workers.

Most lawmakers have welcomed the bill as an acceptable compromise.

“This bill, that passed in both the houseand the Senate, includes about 95% of the compromise language we developed in the Conference Committee,” said Senator Mike Enzi (R- Wyo.), chairman of the Senate Health, Education Labor and Pensions Committee. “It’s a package that will significantly strengthen pension funding rules, help curb record pension failures and better protect the retirement dreams of 45 million Americans.”

“Although we didn’t get everything we wanted in this bill, I am pleased the Congress will not leave this critical job unfinished as we adjourn Read more…

The purpose of this article is to demonstrate the importance of the tax impact in the sale of your business. As an M

If you are really well-to-do you could employ an account to look after your tax affairs, but for most of us this is not a realistic proposition. The resultant charge for the accountant?s services could well exceed any saving achieved, so we have to deal with the problem ourselves. This is not too bad if it is dealt with in a logical order rather than the system which is employed by many ? last minute blind panic!

It is fairly certain that most of us have been in that position at some time, and it certainly does not produce the best results. So you are going to be your own accountant. You start with a big advantage ? a good knowledge of your financial situation and records. Well you do, don?t you? Of course you do, because during the last tax year you have not destroyed one piece of paper which could have a bearing on the tax due.

You will have kept clear records if you are self employed, but even if you are on PAYE you must retain anything which may be relevant. This will not be a massive heap of paper, but must include the obvious essentials such as bank statements, building society books, dividend vouchers and any documents from the tax office.

One item which you will almost certainly have received from the taxman is your ?notice of coding?. Put simply, this tells you how much you can earn before tax becomes payable. If in doubt about what it means read the leaflet which accompanies the notice; it explains the significance of your code number in a very straightforward way.

It is very important to check that the figures used are correct. The current tax free earning limit is ?5035 per year although there are variations for older persons. If you do pay tax, check out your spouse, not to see if they will pay some for you but to ensure that they use all their tax free allowance. If they don?t, look at the possibility of moving some of your investments to them to use the surplus allowance.

Alternatively you should consider moving investments into tax free ISAs. You can invest in various types of ISA but there is an annual limit on the amount which you can invest. Your return on these can be in the form of variable sums of money paid into your bank or building society account at intervals (sometimes as frequently as every month), or rolling up into a lump sum at the end of the investment period. These investments are tax free to the point that it is not even necessary to mention them to the taxman; money laundering regulations however will necessitate you providing proof of identity i.e. a passport or similar.

Many tax affairs can be difficult and there are some strange sounding clauses in relation to coding, so if Read more…

During a beautiful summer day, it is easy to forget some of the things you have to take care of. If you filed an extension on your taxes earlier this year, the deadline is approaching.

Highly disciplined Americans are known for always being organized and getting their taxes filed on time. They plan ahead for their taxes and then meet with their tax professional to get the returns prepared. A few weeks prior to the first deadline, the file their taxes and prepare for next year. Yeah, right. While this is true for many people, there are a number of us that file extensions.

When filing an extension, we all swear on our mother?s grave that we will get on top of the situation well before the extension period runs out. Well, did you? If not, the clock is ticking and it is late in the fourth quarter of the football game.

For corporate filings, the tax extension period is coming very fast indeed. If you were supposed to have filed on March 15th, you had the right to file for an automatic 6 month extension. This means September 15th is now the magical filing date for your returns. Since corporate returns tend to be complex, now is the time to get working on them.

Of course, most people file extensions for their personal tax returns. In a change from previous years, you are now given Read more…

Norway certainly is an interesting country in that taxes are so high it tends to balance out everything. You see if you start making too much money, why produce anymore than you need, you just pay most of it in taxes anyway. Norway has a huge Middle Class, like 98 plus percent or more we are told. The taxes are outrageous and it seems to be social engineering thru taxation, but does that really make sense?

For instance if people do not wish to work more than they need because they will simply be paying more in taxes then why work any more than one has too? If everyone has the same amount of everything then eventually everyone considers themselves equal because they are. Well economically speaking that is. Yet one has to ask isn?t that really moving people more towards socialism, as in if the government taxes are so high then the government uses these taxes to provide more and in Read more…