MORRIS COUNTY — Senator Joe Pennacchio introduced a Senate resolution urging the United States Congress to pass legislation to help hundreds of thousands of businesses struggling to survive the coronavirus pandemic.
The resolution (SR-69) seeks federal action to assist commercial tenants and landlords as businesses remain closed and lease payments become due.
“We want to prevent a domino effect that could do irreparable damage to local economies,” said Pennacchio (R-26). “Companies can’t conduct business, employees lose their jobs, lease payments are missed, and landlords can’t make their mortgage payments. This resolution, as is my bill (S-2460) in the New Jersey legislature, provides a safety net to prevent businesses from closing forever and landlords from facing bank foreclosures.”
The resolution asks Congress to allow commercial property owners who voluntarily offers rental forgiveness to business tenants to claim a portion of the lost rent as a tax deduction. Landlords who forgive rent during the COVID crisis would be eligible to claim a portion of the discount, up to $15,000 as a deduction against their federal income tax under Pennacchio’s initiative.
“Our recovery from this fiscal calamity requires unconventional considerations,” said Pennacchio. “There is a lot of benefit with this plan, and no new bureaucracy. When businesses lock their doors forever and valuable real estate sits vacant and abandoned, it has a devastating impact on neighborhoods and entire regions.”
Unlike Senator Pennacchio’s state legislation, S-2460, which would allow a New Jersey income tax credit of up to $5,000 to landlords who voluntarily forgive any or all of a business rent up to $15,000, the federal resolution calls for a tax deduction.
Pennacchio noted the net dollar amounts between using credit for the state and a federal deduction for those in the 30 percent federal tax bracket are very similar.