Committee releases bill offering tax relief for historic diners after owners’ testimony

The Assembly Commerce and Economic Development Committee on Monday released Assembly Bill 3613, a measure to create an annual registry of historic diners and restaurants and to offer sales-tax exemptions and a $25,000 tax credit to qualifying establishments. Committee members approved the bill with committee amendments and released it to the next legislative step.

Supporters told the panel the measure is designed to preserve long-running New Jersey diners that ‘‘are part of our identity.’’ Nick Pfeiffas, owner of Ponzi’s Diner in Cherry Hill, said diners operate on thin margins and face rising food, labor and overhead costs. ‘‘Restaurants operate on profit margins of just 3 to 5%, and that leaves very little room for error,’’ Pfeiffas said, adding that the $25,000 credit and a simplified sales-tax exemption would reduce administrative burdens and allow owners to reinvest in employees and facilities.

Spiro Hajiero of Colonial Diner in East Brunswick said his business employs about 55 people and that many standalone diners are older and require ongoing capital investment. ‘‘We’ve lost about half our diners in New Jersey in the last 20 years,’’ he said, citing closures that accelerated during and after COVID-19.

Amanda Stone of the Restaurant and Hospitality Association said the industry appreciates sponsors’ work on the bill and deferred detailed remarks to the diner owners. Representatives for NJBIA and other industry groups were recorded as supporting the bill.

During committee questioning, owners cited several cost pressures that they said are distinct from newer restaurants: large, diverse menus (one witness cited "400 to 500 items"), higher maintenance and repair costs for standalone buildings, and recurring capital expenditures (examples given included roughly $25,000 for parking-lot repairs and $250,000 for equipment upgrades). Testimony framed the bill as economic relief and cultural preservation rather than a general subsidy for all food establishments.

The committee’s recorded vote included one explicit opposition and one abstention: Assemblyman Peterson said the bill ‘‘picks winners and losers’’ and registered a no vote; a committee member indicated an abstention while expressing appreciation for the bill’s intent but said they were still reviewing finer points. Other members voted to release the bill; the committee announced the bill as released with committee amendments.

The bill’s amendments clarify the application and annual-review process for the historic-diner registry, require the approving director to notify the Division of Taxation, and expand the sales-tax exemption to apply to all sales of prepared foods and beverages at an eligible historic diner or restaurant. The bill text also adds standard rules for claiming tax credits through partnerships and S corporations and several technical adjustments.

Next steps: The committee released the amended bill for further consideration by the full Assembly. No effective dates or fiscal-note details were specified during the committee record.

Sources: Committee reading and witness testimony recorded during the Assembly Commerce and Economic Development Committee meeting.