club_cafe: New Jersey Taxing Investment Clubs

iras1 on

Ted,

I think you've confused a few things here. S1770 will NOT IMPOSE a $150 per individual tax on members that have $50,000 (or $25,000 if the S1773 language is adopted) in their club. The $150 per individual fee is ALREADY part of NJ law. The Senate bills will EXEMPT members of "smaller" clubs from the fee.

The Senate Budget Committee unanimously agreed with you and the other investment club members who spoke out that the existing law was unfair to small investors. They have "voted out" the exemption so it can be considered by the full Senate (and Assembly).

Members of NJ clubs should be encouraging their Senators and Assembly(wo)men to vote FOR this bill, not against it. A vote against will insure the demise of investment clubs in the state of NJ as we will all be subject to the $150/member annual fee. A vote FOR the bill will exempt most of us from the fee. Personally, if I can get to the point where my personal share of club assets is greater than $50,000, I will gladly pay $150/year to help defray the costs of running the state.

For those who wish to contact their Senators/Assembly(wo)men, a useful set of facts are that the annual fee is projected to bring in between $1.15 and 1.8 million/year (according to the State Treasurer's office). The 2002 corporation tax (P.L. 2002. ch. 40) of which it is part, is projected to raise $1.8 billion/year. The $150 fee is a minuscule part of the revenue stream.

BTW, if anyone wants to hear the discussion of the bills (including Ted Mechnick's testimony), it can be found here:

http://www.njleg.state.nj.us/MEDIA/OLS_MEDIA_PLAYER.HTM?wma=!{A}http://rmserver.njleg.state.nj.us/internet/2002/SBA/1212-0100PM-2.wma!

Discussion begins about 26 minutes into the session and continues for another 35 minutes.

Ira Smilovitz

In a message dated 12/20/02 6:31:26 PM Eastern Standard Time, tmech@bivio.com writes:

Dear Club Members in New Jersey,

Please be advised that our State Government intends to vote on a Bills s-1770 or S-1773 which would impose a $150 per individual tax on members that have $25,000 in there club.

My self and about 20 nj Club Members were at the Appropriations meeting last Thursday and had we not been there they would have probably pushed it to the next step which is a Senate vote.

After 4 of us were allowed to address them they voted unnanimously to re-look at it. They dis and lowered the amount per individual to $25,000 from $50,000.

Senator Singer and Senator Bark are trying to exempt Clubs.

We need your help. If you don't voice your opposition to this bill I am afraid we will be taxed higher and higher until it won't benefit us to be members of a club.

The following is a website where you can find out who your Senator is:
www.njleg.state,nj.us/

Please take the time to write them.

My name is Ted Mechnick
Pres. NJ Model Club

Email Trok415@aol.com

Thank you in Advance

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