"Saving Our Diners and Preserving Our Past (SODA POP) Act"; provides sales and use tax exemption and corporation business and gross income tax credits for historic diners and historic restaurants included in online registry.*
Assembly Bill 3613, the “Saving Our Diners and Preserving Our Past (SODA POP) Act,” creates a state registry for historic diners and historic restaurants and ties eligibility for tax benefits to inclusion on that registry. To qualify, a diner or restaurant must generally have operated continuously for at least 25 years, meet small-business requirements, comply with health, safety, and zoning rules, and, for historic restaurants, be family-owned. The Division of Travel and Tourism would solicit applications, maintain and publish the registry, and notify the Division of Taxation when an establishment is approved.
The bill provides two main tax benefits for approved establishments. First, it exempts sales of prepared food and beverages for on-site consumption at a historic diner or historic restaurant from the sales and use tax for 12 months after the exemption certificate is issued. Second, it creates a corporation business tax credit and a gross income tax credit equal to 10 percent of eligible ingredient costs, capped at $25,000 per taxpayer per year or privilege period. The credits may be carried forward for up to seven years, and the bill also allows transfer of the credits through a tax credit transfer certificate under specified conditions.
In practical terms, the bill would amend New Jersey’s sales and use tax law and supplement the corporation business tax and gross income tax statutes to carve out a targeted incentive for long-standing diner and restaurant businesses. It would shift administrative responsibilities between the Division of Travel and Tourism and the Division of Taxation, require documentation of ingredient costs, and define which establishments and food purchases qualify. The bill is structured to take effect immediately, with the tax exemptions and credits beginning on or after January 1 of the year after enactment.
The overall sentiment reflected in the available record is generally favorable toward preservation of iconic local businesses, as shown by the committee’s decision to report the bill with amendments by a 4-1 vote. The bill’s framing as a preservation and economic-support measure suggests support for helping historic diners and family-owned restaurants remain viable. At the same time, the amendments and the lone dissent indicate some caution about the scope or administration of the tax benefits.
The main points of contention appear to be the cost and breadth of the tax incentives, the administrative burden of maintaining and verifying the registry, and the line-drawing involved in defining which establishments count as diners or historic restaurants. Because the bill limits benefits to businesses that meet specific age, ownership, and compliance criteria, questions may arise about fairness to newer or non-family-owned restaurants and about whether the state should subsidize food sales through tax exemptions and credits. The available materials do not include transcript debate, so the precise objection of the dissenting vote is not stated.
The bill would amend the New Jersey Sales and Use Tax Act to exempt prepared food and beverage sales for on-site consumption at qualifying historic diners and historic restaurants for a 12-month period after certification. It would also add new provisions to the Corporation Business Tax Act and the New Jersey Gross Income Tax Act creating refundable-style, transferable tax credits equal to 10 percent of eligible ingredient costs, subject to a $25,000 annual cap and carryforward rules. In addition, it assigns the Division of Travel and Tourism responsibility for creating and maintaining the registry and the Division of Taxation responsibility for issuing exemption and credit certificates, thereby creating a new administrative framework for identifying eligible establishments and administering the incentives.
The bill appears to have a positive preservation-oriented reception overall, with the Assembly Commerce and Economic Development Committee reporting it with amendments by a 4-1 vote. That vote suggests majority support for helping historic diners and restaurants, especially as small businesses and cultural landmarks, while also indicating at least some concern about the details. No floor votes or hearing transcript are provided, so the broader legislative sentiment beyond committee action cannot be determined from the record.
The likely areas of contention are the fiscal impact of exempting restaurant sales from sales tax and granting income and business tax credits, the administrative complexity of verifying eligibility and renewing registry status, and the policy choice to favor long-established, family-owned businesses over other restaurants. The bill’s definitions also create potential disputes over what qualifies as a diner versus a café, deli, tavern, or sandwich shop, and over whether a business has been continuously operating for 25 years. The single dissenting committee vote suggests at least one member had reservations, but the specific objection is not available in the provided materials.