9. a. For taxable years beginning on or after the effective date of P.L.2017, c.254 (C. 24:6M-1 et seq.), a taxpayer that is a donor shall be allowed a credit against the tax otherwise due under the “New Jersey Gross Income Tax Act,” N.J.S. 54A:1-1 et seq., in an amount equal to the sum of: the cost to the taxpayer of the over-the-counter drugs, prescription drugs, and administration supplies as determined pursuant to 26 U.S.C. § 170(e)(3)(A); and the verifiable cost to the taxpayer to make the donation of the over-the-counter drugs, prescription drugs, and administration supplies to a redistributor during the taxable year in accordance with a drug donation program established pursuant to the provisions of P.L.2017, c.254 (C. 24:6M-1 et seq.), provided that:

(1) the donor paid for, owned, or was responsible for the over-the-counter drugs, prescription drugs, or administration supplies;

(2) the over-the-counter drugs, prescription drugs, or administration supplies were donated to, and accepted by, a redistributor in accordance with the provisions of P.L.2017, c.254 (C. 24:6M-1 et seq.); and

(3) the redistributor, which processed the donated drug, complies with all recordkeeping requirements for nonsaleable returns to a returns processor under federal law.

b. (1) The order of priority of the application of the credit allowed pursuant to this section and any other credits allowed by law shall be as prescribed by the director. The amount of the credit applied under this section against the gross income tax liability of the taxpayer for a taxable year, together with any other credits allowed by law, shall not exceed 50 percent of the tax liability otherwise due. The amount of the credit allowable under this section which cannot be used to reduce the taxpayer’s gross income tax liability for the taxable year due to the limitations of this section may be carried forward and applied to the earliest available use within the 20 taxable years immediately following the taxable year for which the credit is allowed. The costs of the over-the-counter drugs, prescription drugs, and administration supplies, and the costs incurred in making the donation to a redistributor, that are included in the calculation of the credit allowed pursuant to this section shall not be allowed as an amount calculated or claimed pursuant to any other deduction or credit allowed under the gross income tax.

(2) A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a credit directly under the gross income tax, but the amount of credit of a taxpayer in respect of a distributive share of partnership income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the partnership that is equal to the taxpayer’s share, whether or not distributed, of the total distributive income or gain of the partnership for its taxable year ending within or with the taxpayer’s taxable year. A New Jersey S corporation shall not be allowed a credit directly under the gross income tax, but the amount of credit of a taxpayer in respect of a pro rata share of S Corporation income shall be determined by allocating to the taxpayer that proportion of the credit acquired by the New Jersey S Corporation that is equal to the taxpayer’s share, whether or not distributed, of the total pro rata share of S Corporation income of the New Jersey S Corporation for its privilege period ending within or with the taxpayer’s taxable year.

c. As used in this section: “donor,” “over-the-counter drugs,” “prescription drugs,” “administration supplies,” “redistributor,” “returns processor,” and “drug donation program” shall mean the same as those terms are defined by section 2 of P.L.2017, c.254 (C. 24:6M-2).

L.2017, c.254, s.9.