|FOR IMMEDIATE RELEASE||
|November 26, 2002||(609) 633-6565|
Partnership Fee Waived For Investment Clubs Below $60,000
(TRENTON) - Treasurer John McCormac announced today Treasury will waive the $150 tax form processing fee established under the Corporate Business Tax reforms for investment clubs with fewer than $60,000 in shared capital assets.
"One of the key objectives of our tax reforms was to reach pass-through business entities that profited economically from their presence in New Jersey, yet paid nothing in taxes to the State," said Treasurer McCormac. "The processing fee was intended to compensate the State for the large volume of return processing and compliance enforcement from these entities. Friends and neighbors who pool their money for enjoyment or investment growth should not be subject to the same fee treatment," McCormac said.
Treasurer McCormac said the processing waiver was considered after Democratic Senate President Richard J. Codey, Assembly Speaker Albio Sires and Senator Barbara Buono approached him with concerns from constituents over how the processing fee affected some investment clubs.
"The reforms enacted this year closed loopholes and promoted fairness and equity in corporate tax law," said Senator Codey. "I am pleased that the Treasurer recognizes that waiving the processing fee for small investment clubs is also fair and in no way diminishes the effectiveness of CBT reforms," he said.
Assembly Speaker Sires noted that investment clubs are usually small groups of individuals interested in learning about and practicing investments in the stock market. "Small investment clubs introduce members to Wall Street; they do not do business like large pass-through entities. Waiving the processing fee is a fair and reasonable step on behalf of small New Jersey investors learning about the stock market," Sires said.
Senator Buono, D-Middlesex, added: "This regulation will essentially achieve the objective of legislation I have introduced (S-1985), by ensuring that small private investment clubs in New Jersey are not adversely affected by the Corporate Business Tax reforms."
Treasurer McCormac said that the processing fee exemption is consistent with efforts by the McGreevey Administration to protect small New Jersey businesses as the State moves forward with corporate tax reforms.
"We fashioned the processing fee in sensitivity to small firms, exempting partnerships with less than three members from the $150 per partner processing fee."
"We recognize that small investment clubs with limited shared capital assets do not fit the definition of a pass-through entity as envisioned in the reform law."
McCormac has directed the Division of Taxation to draft regulations
to exempt small investment clubs with fewer than $60,000 in combined
capital assets. In the meantime, the Division will proceed as if this
regulation is already in effect, and will waive the assessment of the
fee to members of small clubs.