S 2165 — "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.*

S2165 1R [First Reprint] SENATE, No.

Senators TestaTesta, Amato, Tiver and AmatoCryan         SYNOPSIS      "Saving Our Diners and ProtectingPreserving 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 onin annualonline registry.

  CURRENT VERSION OF TEXT      IntroducedAs Pendingreported Technicalby Reviewthe bySenate LegislativeEconomic Counsel.Growth Committee on February 12, 2026, with amendments.

   An Act providing tax incentives for certain historic eating establishments, designated as the “Saving Our Diners and Protecting1[Protecting] Preserving1 Our Past 1(SODA POP)1 Act,” amending P.L.1966, c.30 (C.54:32B-1 et seq.), and supplementing various parts of the statutory law.

serves serves food and beverages to customers primarily for on-site consumption at a booth, table, or counter setting;

1and1 engages primarily in the preparation and serving of a wide variety of menu offerings, including, but not limited to, hamburgers, salads, sandwiches, soups, breakfast items, entrees, pastries, pies, and beverages.  "Diner" shall only include food establishments that are commonly known and regarded as diners, and shall not include any café, delicatessen, tavern, bar, sandwich shop, or other food establishment.

     b.    The Director of the Division of Travel and Tourism in the Department of State shall establish and maintain an1[an annualannual] a1 historic diner and restaurant registry listing all historic diners and historic restaurants in the State.  The historic diner and restaurant registry shall include the location and history of each historic diner and historic restaurant and any other information the director deems necessary to increase awareness of historic diners and restaurants in the State.

     c.     Within six months after the effective date of P.L.    , c.    (C.        ) (pending before the Legislature as this bill), and each1[each yearyear] annually1 thereafter, the director shall solicit applications from the operators of historic diners and historic restaurants in the State for inclusion1initial1 inclusion1, and annual renewal,1 on the annual1[annual]1 historic diner and restaurant registry, which applications shall include such information and documentation as the director deems necessary to determine whether the diner or restaurant qualifies as a historic diner or historic restaurant.

     d.    Within 12 months after the effective date of P.L.    , c.    (C.        ) (pending before the Legislature as this bill), and1[and each year thereafter,thereafter,]1 the director shall establish an1[an annualannual] a1 historic diner and restaurant registry, 1which the director shall update annually, and1 which shall include a listing of all historic diners and historic restaurants for which an application submitted pursuant to this section was approved by the director.  Upon establishing the annual1[annual]1 historic diner and restaurant registry, the director shall publish the registry on the official Internet website of the Division of Travel and Tourism in the Department of State.

     e.     1(1)1 Upon approval of an application submitted pursuant to this section, the director shall issue:1notify the Director of the Division of Taxation in the Department of the Treasury that a historic diner or historic restaurant has been added to the historic diner and restaurant registry and is eligible for a sales tax exemption and tax credit pursuant to P.L.    , c.     (C.        ) (pending before the Legislature as this bill).

     (1)  (2)   aUpon salesnotice taxfrom exemption certificate to the operatorDirector of the historicDivision diner or historic restaurant, which certificate shall authorize the exemption of theTravel sale of prepared food and beveragesTourism for on-site consumption at the historic diner or historic restaurant from the sales and use tax, as provided pursuant to sectionparagraph 3(1) of P.L.1966,this c.30subsection, (C.54:32B-3), for the 12-monthDirector period following the date of receipt of the certificate. Division The director shall also transmit a copy of eachTaxation salesshall1 taxissue exemption1to certificate issued pursuant to this paragraph to the Directoroperator of the Divisionhistoric ofdiner Taxationor inhistoric therestaurant1: Department of the Treasury;

and      (2)  1[(1)] (a)1  a sales tax creditexemption certificate to1[to the operator of the historic diner or historic restaurant,restaurant]1, which tax credit certificate mayshall beauthorize usedthe forexemption of the purposessale of sectionsprepared 3food and 4beverages offor P.L.    ,on-site c.    (C.        )consumption (pendingat beforethe historic diner or historic restaurant from the Legislaturesales and use tax, as thisprovided bill)pursuant to section 3 of P.L.1966, c.30 (C.54:32B-3), for the privilege12-month period orfollowing taxablethe yeardate inof whichreceipt of the certificate is1[.  issued.  The director shall also transmit a copy of each sales tax creditexemption certificate issued pursuant to this paragraph to the Director of the Division of Taxation in the Department of the Treasury.Treasury]1;

and      1[(2)] (b)1  a tax credit certificate 1[to the operator of the historic diner or historic restaurant]1, which tax credit certificate may be used for the purposes of sections 3 and 4 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill) for the privilege period or taxable year in which the certificate is issued.  1[The director shall also transmit a copy of each tax credit certificate issued pursuant to this paragraph to the Director of the Division of Taxation in the Department of the Treasury.]1        2.    Section 3 of P.L.1966, c.30 (C.54:32B-3) is amended to read as follows:

     (2)   Installing tangible personal property or a specified digital product, or maintaining, servicing, repairing tangible personal property or a specified digital product not held for sale in the regular course of business, whether or not the services are performed directly or by means of coin-operated equipment or by any other means, and whether or not any tangible personal property or specified digital product is transferred in conjunction therewith, except (i) such services rendered by an individual who is engaged directly by a private homeowner or lessee in or about his1[his] that private homeowner's or lessee's1 residence and who is not in a regular trade or business offering his1[his] that individual's1 services to the public, (ii) such services rendered with respect to personal property exempt from taxation hereunder pursuant to section 13 of P.L.1980, c.105 (C.54:32B-8.1), (iii) (Deleted by amendment, P.L.1990, c.40), (iv) any receipts from laundering, dry cleaning, tailoring, weaving, or pressing clothing, and shoe repairing and shoeshining, and (v) services rendered in installing property which, when installed, will constitute an addition or capital improvement to real property, property or land, other than landscaping services and other than installing carpeting and other flooring, and other than sign installation services.

     (4)   Maintaining, servicing, or repairing real property, other than a residential heating system unit serving not more than three families living independently of each other and doing their cooking on the premises, whether the services are performed in or outside of a building, as distinguished from adding to or improving the real property by a capital improvement, but excluding services rendered by an individual who is not in a regular trade or business offering his1[his] that individual's1 services to the public, and excluding garbage removal and sewer services performed on a regular contractual basis for a term not less than 30 days.

and      (2)   Receipts from sales of food and beverages sold through vending machines, at the wholesale price of such sale, which shall be defined as 70% of the retail vending machine selling price, except sales of milk, which shall not be taxed.  Nothing herein contained shall affect other sales through coin-operated vending machines taxable pursuant to subsection (a) above1[above] of this section1 or the exemption thereto provided by section 21 of P.L.1980, c.105 (C.54:32B-8.9).

     A.   food sold by a seller whose proper primary NAICS classification is manufacturing in section1[section] subsector1 311, except subsector1[subsector] 3118industry group1 (bakeries);

     (e)   (1)  Any admission charge to or for the use of any place of amusement in the State, including charges for admission to race tracks, baseball, football, basketball or1[or] ,1 exhibitions, dramatic or musical arts performances, motion picture theaters, except charges for admission to boxing, wrestling, kick boxing, or combative sports exhibitions, events, performances, or contests which charges are taxed under any other law of this State or under section 20 of P.L.1985, c.83 (C.5:2A-20), and, except charges to a patron for admission to, or use of, facilities for sporting activities in which the patron is to be a participant, such as bowling alleys and swimming pools.  For any person having the permanent use or possession of a box or seat or lease or a license, other than a season ticket, for the use of a box or seat at a place of amusement, the tax shall be upon the amount for which a similar box or seat is sold for each performance or exhibition at which the box or seat is used or reserved by the holder, licensee, or lessee, and shall be paid by the holder, licensee, or lessee.

P.L.2022, c.97, s.2)        3.    (New section)  a.  For privilege periods beginning on or after January 1 of the year next following the effective date of P.L.    , c.    (C.        ) (pending before the Legislature as this bill), a taxpayer that operates a historic diner or historic restaurant shall be allowed a credit against the tax due pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) in an amount equal to percent of the costs incurred by the taxpayer during the privilege period for the purchase of any eligible ingredients used in the preparation of foods or beverages at the historic diner or historic restaurant.  The value of the credit allowed pursuant to this section shall not exceed $25,000 per taxpayer per privilege period.

     b.    The order of priority of the application of the credit allowed pursuant to this section, and any other credits allowed by law against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5),(C.54:10A-5) 1for a privilege period1, shall be as prescribed by the director.  The amount of the credit applied under this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for a privilege period, together with any other credits allowed by law, shall not reduce the tax liability to an amount lower than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5).  The amount of the tax credit otherwise allowable under this section which cannot be applied for the privilege period due to the limitations of this subsection or under other provisions of P.L.1945, c.162 (C.54:10A-1 et seq.) may be carried forward, if necessary, to the seven privilege periods following the privilege period for which the tax credit was issued, after which the tax credit shall expire.

and      (2)   a copy of the tax credit certificate issued by1[by the Director of the Division of Travel and Tourism in the Department of StateState]1 pursuant to subsection e.

and      (2)   a copy of the tax credit certificate issued by1[by the Director of the Division of Travel and Tourism in the Department of StateState]1 pursuant to subsection e.

     d.    (1)1(1) A taxpayerbusiness mayentity applythat tois theclassified directoras for a taxpartnership creditfor transferfederal certificateincome intax lieupurposes ofshall thenot taxpayerbe being allowed anythe amount of tax credit againstdirectly theunder taxN.J.S.54A:1-1 liabilityet ofseq., but the taxpayer,amount asof authorized under this section.  The tax credit transferof certificate, upon receipt thereof by the taxpayer fromin therespect director,of maya bedistributive soldshare orof assigned,partnership inincome fullshall orbe indetermined part,by inallocating theto taxable year during which the taxpayer receivesthat theproportion taxof credit transfer certificate from the director,credit toacquired anotherby person, who may apply the creditpartnership againstthat ais taxequal liability under the tax pursuant to the “Newtaxpayer's Jerseyshare, Grosswhether Income Tax Act,” N.J.S.54A:1-1 et seq., or thenot “Corporationdistributed, Business Tax Act (1945),” P.L.1945, c.162 (C.54:10A-1 et seq.).  The certificate provided to the taxpayer shall include a statement waiving the taxpayer’s right to claim the amount of the credittotal thatdistributive theincome taxpayer has elected to sell or assigngain againstof the taxpartnership for aits taxtaxable liability. year Theending taxwithin creditor certificatewith issued to a taxpayer by the directortaxpayer's shalltaxable beyear. subject to any terms and conditions that the director may prescribe;

     (2)   A taxpayer that is a New Jersey S corporation shall not be allowed the credit directly under N.J.S.54A:1-1 et seq., 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.

     e.1  (1) A taxpayer may apply to the director for a tax credit transfer certificate in lieu of the taxpayer being allowed any amount of tax credit against the tax liability of the taxpayer, as authorized under this section.  The tax credit transfer certificate, upon receipt thereof by the taxpayer from the director, may be sold or assigned, in full or in part, in the taxable year during which the taxpayer receives the tax credit transfer certificate from the director, to another person, who may apply the credit against a tax liability under the tax pursuant to the “New Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq., or the “Corporation Business Tax Act (1945),” P.L.1945, c.162 (C.54:10A-1 et seq.).  The certificate provided to the taxpayer shall include a statement waiving the taxpayer’s right to claim the amount of the credit that the taxpayer has elected to sell or assign against the tax for a tax liability.  The tax credit certificate issued to a taxpayer by the director shall be subject to any terms and conditions that the director may prescribe;

     e.    1[e.] f.1  As used in this section:

    STATEMENT        The bill, designated as the “Saving Our Diners and Protecting Our Past Act,” provides certain tax benefits to historic diners and historic restaurants throughout the State.

     Specifically, the bill requires the Division of Travel and Tourism in the Department of State to establish an annual historic diner and restaurant registry to certify the historic diners and historic restaurants that have been in continuous operation in the State for at least 25 years.  Any historic diner or historic restaurant included on the annual registry would be entitled to:  (1) a sales and use tax exemption for the sales of prepared foods and beverages for on premises consumption at the historic diner or historic restaurant;

and (2) a corporation business tax or gross income tax credit for a portion of the costs incurred for the purchase of eligible ingredients used in the preparation of foods and beverages at the historic diner or historic restaurant.

  Historic Diner and Restaurant Registry      Under the bill, the Director of the Division of Travel and Tourism in the Department of State is required to solicit applications from the operators of historic diners and historic restaurants throughout the State for inclusion on an annual historic diner and restaurant registry.  Operators of these establishments would be required to include any information and documentation deemed necessary by the director to determine whether the diner or restaurant qualifies as a historic diner or historic restaurant.

     As defined in the bill, a “historic diner” means a food establishment that:  (1) serves food and beverages to customers primarily for on-site consumption at a booth, table, or counter setting;

(2) engages primarily in the preparation and serving of a wide variety of menu offerings, including, but not limited to, hamburgers, salads, sandwiches, soups, breakfast items, entrees, pastries, pies, and beverages;

(3) qualifies as a small business concern within the meaning of the federal "Small Business Act," 15 U.S.C.

s.631 et seq.;

and (4) has been in continuous operation for at least 25 years, including any period of time in which the establishment was required to suspend dine-in services as a result of a public health emergency.  The bill further clarifies that a “historic diner” may only include food establishments that are commonly known and regarded as diners, and shall not include any café, delicatessen, tavern, bar, sandwich shop, or other food establishment.

     The bill also defines a “historic restaurant” to mean any food establishment that:  (1) operates in a fixed location, in which the principal business is the sale of food and beverages to customers for consumption on the premises;

(2) has been solely owned and operated by one or more family members for the entire period in which the business has been in operation;

(3) qualifies as a small business concern within the meaning of the federal "Small Business Act," 15 U.S.C.

s.631 et seq.;