TURNER-VAN DREW BILL EXCLUDING COMBAT PAY FROM NJ INCOME TAX ADVANCES

The Bill Would Also Provide Exclusion For Certain Military Compensation From The New Jersey Gross Income Tax

TRENTON – Legislation sponsored by Senator Shirley K. Turner and Senator Jeff Van Drew that would exclude armed services combat zone pay from gross income taxation and provide exclusion for certain military compensation from the New Jersey gross income tax for those servicemen and women domiciled in New Jersey but serving their duty outside the state cleared the Senate today.

“Our service men and women’s deep commitment to the safety of their fellow citizens and the wellbeing of our country propels them to confront the ultimate danger and put their own lives on the line.  That commitment now propels the State of New Jersey to offer the same consideration already given by the federal government,” said Senator Turner (D-Mercer/ Hunterdon). “By excluding their combat zone pay from taxation, we are recognizing their enormous contribution to our country and acknowledging that the traumas they carry from battle are enough of a tax.”

“By excluding combat pay and compensation received during hospitalization or out-of-state service from state income tax , New Jersey demonstrates our respect for the heroic bravery of our military men and women and expresses our gratitude for their profound sacrifices,” said Senator Van Drew (D-Atlantic/Cape May/Cumberland). “It is the least we can do for those who fight to uphold our rights and freedoms. The value of these tax breaks are dwarfed by our service people’s enormous contributions to our national security.”

The bill, a Senate Committee Substitute for S-129/1025, would specifically exclude military pay for service in a combat zone or for hospitalization as the result of injury while serving in a combat zone from taxable gross income under the New Jersey gross income tax. The bill uses federal definitions of combat zone pay to exclude from New Jersey taxation the same pay that is excluded from federal income taxation. In addition, the bill would provide exclusion for certain military compensation from the New Jersey gross income tax for those servicemen and women domiciled in New Jersey but serving their duty outside of the State of New Jersey.

Under the current federal law, income received for combat zone compensation by members of the Armed Forces of the United States is generally excluded from federal income taxation.

A combat zone is defined as any area the President of the United States designates by Executive Order as an area in which the U.S. Armed Forces are engaging or have engaged in combat.

The bill would take effect immediately and apply to taxable years beginning on or after January 1 next year following the date of enactment.

The bill was approved 37-0 by the Senate and next heads to the Assembly for further consideration.