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Singleton Bill to Allow Municipalities to Create Property Tax Reward Programs to Support Local Businesses, Help Lower Property Taxes Clears Assembly Panel

(TRENTON) – Legislation sponsored by Assemblyman Troy Singleton to allow municipalities to create a property tax reward program that would help drum up business for local merchants while helping lower property tax bills for property owners was released Monday by an Assembly panel.

The bill (A-2901) would allow municipalities to authorize, by resolution, the creation, and the operation of a property tax reward program. Singleton said the program would be structured as a local merchant loyalty program and marketed as an economic development tool to encourage people who live in and around the municipality to shop at businesses located in the municipality.

“Local businesses contribute to the local economy and help build strong communities. If the local businesses in a town are thriving, the town and its residents benefit,” said Singleton (D-Burlington). “Under the program proposed by the bill, property owners would get to see a reduction on their property tax bill by shopping locally, and local store owners and merchants would benefit from the increase in business. This is a great way to incentivize people to support local businesses, help drive foot traffic to local shops and businesses and build a robust local economy.”

The property tax reward program created under the bill would provide cash rewards to municipal residents, municipal employees, people who are employed in the municipality, and residents of other municipalities who participate in the program by purchasing goods or services from businesses located in the municipality that agree to provide cash rewards under the property tax reward program. The program would be operated by a private entity designated by the municipality.

The program would operate through the use of a reward card.

The program operator would have to provide the municipal tax collector, no later than June 1 annually, with a list of program participants who are property owners, and the dollar amount of the annual rebate these property owners earned between May 1st and April 30th. The operator would also have to transfer the total dollar value of all annual rebates earned by those property owners.

The tax collector would note on the property tax bill of each participating customer the amount of the annual rebate earned, and would subtract that amount from the total amount of property taxes due and payable on the property for the tax year.

No later than June 1st annually, the operator would issue to each participating customer who is not a property owner within the municipality a rebate check for the amount of the annual rebate earned by the participating customer between May 1st and April 30th.

Essentially, the bill codifies current practice. Many municipalities have created, or will create, property tax reward programs during the next year. Marlboro Township in Monmouth County has actually provided “rebates” under its program, which began operation on September 12, 2012. Between that date and April 30, 2013, program participants in the “Shop Marlboro” program earned property tax “rebates” that totaled $20,000 on sales of $360,000 from Marlboro businesses. In any municipal program, the amount of each annual reward will depend on how many times goods or services are purchased from local businesses and the reward percentage offered by those businesses.

The bill was released by the Assembly State & Local Government Committee.