2023 New Jersey Revised Statutes › Title 54 - Taxation › Section 54:18A-1a - Equivalent of franchise tax to municipalities and counties

54:18A-1a. Equivalent of franchise tax to municipalities and counties
a. To ensure that no county or municipality will experience a loss of revenue as a result of the repeal of the franchise tax on domestic insurance companies, the State Treasurer, upon warrant of the State Comptroller, shall, on or before August 1, 1982 and on or before August 1 annually thereafter, pay to the collector of the municipality and to the county treasurer of a county in which a domestic insurance company's principal office was situated on January 1, 1981, an amount determined by increasing the total amount of franchise taxes received by the municipality or county in the prior calendar year by the percentage rate of change of all taxes paid by all insurance companies pursuant to P.L.1945, c.132 (C.54:18A-1 et seq.), but excluding any surtax payments made pursuant to section 76 of P.L.1990, c.8 (C.17:33B-49) and excluding any tax payments made for the additional tax imposed to provide for Department of Insurance administrative costs pursuant to R.S.54:16-8 and sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and 54:18A-3) as amended by P.L.1990, c.8 (C.17:33B-1 et al.), for the current and the immediately preceding tax years.
The payments shall continue to be made so long as the principal office of the domestic insurance company remains at the location established on January 1, 1981. No liability for payment under this section shall arise by virtue of the relocation of the principal office of a domestic insurance company to another municipality, whether or not within the same county.
b. To ensure that no municipality will experience an abrupt loss of revenue as a result of a domestic insurance company relocating its principal office from the municipality wherein it was established on January 1, 1981, the State Treasurer, upon warrant of the State Comptroller, shall, on or before August 1 of each year, pay to the collector of the municipality from which the principal office was removed, an amount as hereinafter provided:
(1) For the first year after relocation, an amount equal to 80% of the amount the municipality received in the year in which the relocation occurred;
(2) For the second year after relocation, an amount equal to 60% of the amount the municipality received in the year in which the relocation occurred;
(3) For the third year after relocation, an amount equal to 40% of the amount the municipality received in the year in which the relocation occurred;
(4) For the fourth year after relocation, an amount equal to 30% of the amount the municipality received in the year in which the relocation occurred; and
(5) For the fifth year after relocation, an amount equal to 15% of the amount the municipality received in the year in which the relocation occurred.
No municipality shall be entitled to any payment under this subsection for any year following the fifth year after relocation.
c. To ensure that no county will experience an abrupt loss of revenue as a result of a domestic insurance company relocating its principal office from the county wherein it was established on January 1, 1981, the State Treasurer, upon warrant of the State Comptroller, shall, on or before August 1 of each year, pay to the treasurer of the county from which the principal office was removed, an amount as hereinafter provided:
(1) For the first year after relocation, an amount equal to 80% of the amount the county received in the year in which the relocation occurred;
(2) For the second year after relocation, an amount equal to 60% of the amount the county received in the year in which the relocation occurred;
(3) For the third year after relocation, an amount equal to 40% of the amount the county received in the year in which the relocation occurred;
(4) For the fourth year after relocation, an amount equal to 30% of the amount the county received in the year in which the relocation occurred; and
(5) For the fifth year after relocation, an amount equal to 15% of the amount the county received in the year in which the relocation occurred.
No county shall be entitled to any payment under this subsection for any year following the fifth year after relocation.
L.1981,c.183,s.3; amended 1983,c.390; 1990,c.8,s.79.