New Jersey Bill to Create a State Charitable Deduction

New Jersey Bill S. 2179, a bill to allow all residents a charitable deduction for contributions to New Jersey-based charities, has been introduced in the State Legislature.

AFP is asking members to communicate with their State Assemblypersons and Senators and ask them to support and co-sponsor the bill. We are also working with other organizations in the state to help push for this legislation.

Below you will find talking points about the bill and why it's needed—along with a sample email template you can use when contacting your elected officials. You can identify your legislators by either municipality or your street address.

If you have any questions, contact paffairs@afpglobal.org. Thank you for your participation in this important public policy effort.

About the Bill

• S. 2179 would create a state charitable deduction that any New Jersey taxpayer—regardless of income—could take advantage of, as long as those gifts were made to charities based in New Jersey.
• Under the bill, New Jersey taxpayers would be allowed to deduct from gross income the charitable contributions that are made during the taxable year to qualified New Jersey-based charitable organizations. The amount of the deduction would be limited to the amount of charitable contributions that is allowable as a deduction from federal adjusted gross income to the taxpayer for the federal taxable year.
• "Qualified New Jersey-based charitable organization" is defined as a charitable organization that is registered pursuant to the "Charitable Registration and Investigation Act," or an organization that is exempt from the registration requirements of that act; and that maintains an office, employs persons, and provides services in this State.
• The bill would take effect immediately upon enactment and would apply to charitable contributions that are made in taxable years beginning on or after the January 1 next following the date of enactment.
• S. 2179 has bi-partisan support. It was introduced by State Senate Minority Leader Tom Kean Jr. and co-sponsored by Sen. Robert Gordon [D], Sen. Steve Oroho [R] and Sen. Anthony R. Bucco [R].

Why is S. 2179 Needed?

• The bill would help mitigate the situation in which only taxpayers with incomes high enough to justify itemizing currently enjoy the federal charitable deduction. IRS data, and data from the New Jersey Center for Nonprofits, shows that lower-income families donate a higher percentage of their income to charity than higher-income taxpayers do.
• With the new federal tax law and the doubling of the federal standard deduction, charities are worried that fewer taxpayers will decide to itemize and take advantage of the federal charitable deduction. This could lead to a decrease in giving. S. 2179 will create a powerful incentive for New Jerseyans to continue to give—and give more—to charities providing critically needed services in the state.
• Compared with other states, New Jersey is in the middle of the pack for charitable giving. In 2017, the state ranked 27th overall according to WalletHub's Charity Calculator. When compared with other wealthy states, however, New Jersey ranks last in the percentage of income donated to charity. There is room for significant growth as compared with the need.
• The bill has not been "scored" yet (a study of how much it might cost). However, in an op-ed, Sen. Kean, the original co-sponsor of S. 2179, notes that "the cost would be manageable. Based on taxes paid by the average New Jersey household, the state would lose only $1 in revenue for every $30 in charitable donations. As noted previously, some of that charitable giving will offset the need for other government spending."
• Sources of funding for charitable nonprofit organizations continue to dwindle, even as New Jersey addresses social challenges, the ever-existing threat of natural disasters, and other pressing needs. The generosity of New Jerseyans is a critical resource, addressing immediate needs and long-term investments in our communities. Our collective, unifying goal should be to ensure that New Jersey's communities and charities thrive and remain strong, diverse, and effective.

Take Action!

Contact both your New Jersey Assemblyperson and State Senator and ask them to support and co-sponsor S. 2179.
You can identify your legislators by either municipality or your street address.
You can use the template below for your email or phone call.

Dear:

Please support and co-support S. 2179, which would create a charitable deduction for all taxpayers of New Jersey who give to charities based in our state.

I am the TITLE for the ORGANIZATION, and we are concerned that the new federal tax law on charities may reduce charitable giving. With the doubling of the standard deduction, it is possible that some donors will not give as much as they used to because they will no longer itemize their taxes and take a charitable deduction for their gifts.

[INCLUDE A SENTENCE OR TWO ON WHAT A DECREASE IN GIVING MIGHT MEAN FOR YOUR CHARITY AND PROGRAMS/SERVICES IN THE STATE.]

S. 2179 would change all that and give donors in our state a powerful incentive to continue to give. Even more importantly, the bill allows all New Jerseyans who give to take a charitable deduction, regardless of wealth. That's critical, because lower-income donors give a higher percentage of their income to charity than higher-income taxpayers do, but they cannot take advantage of the charitable deduction.

S. 2179 could significantly transform giving in our state. New Jersey ranks fairly low compared to other states in terms of philanthropic generosity, and many of our charities lack enough funding to adequately provide their critically needed programs. But with a state charitable deduction for all taxpayers, we could see a revitalization of the charitable sector across New Jersey.

Sources of funding for charitable nonprofit organizations continue to dwindle, even as New Jersey addresses social challenges, the ever-existing threat of natural disasters, and other pressing needs. The generosity of New Jerseyans is a critical resource, addressing immediate needs and long-term investments in our communities. Our collective, unifying goal should be to ensure that New Jersey's communities and charities thrive and remain strong, diverse, and effective

Please show your support for the thousands of charities in the state working to create amazing change every day, and the countless donors who give their hard-earned money to great causes, by supporting and co-sponsoring S. 2179.