Senate committee approves charitable-giving legislation

New Jersey Jewish federations hailed a state Senate committee’s approval of a bill that would clarify whether out-of-state donors face a tax bill when giving to NJ charities.

Senate bill S-2532, unanimously approved by the NJ Senate Budget and Appropriations Committee, assures that a person living outside of New Jersey can make a financial contribution — a gift, bequest, donation, or other financial instrument or pledge in any amount — to any NJ 501(c)3 without being considered a resident under the state’s tax law.

The NJ Department of the Treasury reaffirmed that policy as recently as 2008-09 in a press release that had been available on the State of New Jersey website.

The bill was originally introduced by Committee Chair Sen. Paul Sarlo (D-Dist. 36) and Sen. Steven Oroho (R-Dist. 24).

Get New Jersey Jewish News's Newsletter by email and never miss our top stories Free Sign Up

According to Howard Rabner, chief operating officer/chief financial officer of the Jewish Federation of Greater MetroWest NJ, “The Jewish federations in New Jersey and their beneficiary agencies — as well as other local charities generally — are experiencing a growing trend of philanthropic drop-off from financial supporters who move out of state. Philanthropic individuals in Florida, California, or Arizona are currently being counseled against charitable giving to NJ charities.” Rabner said individuals are told they will be subject to NJ tax consequences because past regulations have been insufficiently clear.

“It is difficult to build the capacity of nonprofits in today’s economic environment,” Rabner said. “Nonprofits provide services to those in need at no additional cost to the state. The domicile issue has contributed to the lessening of the ability of nonprofits to provide such services.”

According to Ruth Cole, president of the NJ State Association of Jewish Federations, “Nonprofits touch the lives of all our citizens by protecting, restoring, or enhancing the well-being of our communities. They are also a significant economic force in the state. Accordingly, building the capacity of nonprofits in New Jersey through measures such as S-2532 has always been high on the agenda of the State Association. Initiatives that allow all nonprofits to more efficiently and cost-effectively address their task assist our Jewish federation family of organizations to better meet the needs of our community constituents.”