Cunningham, Stack Bill to Expand Employer Payroll Tax Cleared Senate

TRENTON – Legislation sponsored by Senator Sandra B. Cunningham and Senator Brian P. Stack that would allow large municipalities to impose an employer payroll tax cleared the Senate yesterday.

“The employer payroll tax would generate valuable revenue which could be used to improve our schools and the resources we offer our students,” said Senator Cunningham (D-Hudson).

The bill, S-2581, would allow municipalities with populations over 200,000 to impose an employer payroll tax. The tax rate could be changed as long as it does not exceed one percent. If the municipality has a median household income of $55,000 or more, all revenue generated by the tax would be required to go to the school district and be used for school purposes.

“With a minimal burden on employers, the payroll tax would have a major impact on our municipality, our schools, and the children of Jersey City,” said Senator Stack (D-Hudson).

The tax would not apply to public employers. Municipalities would be allowed to create an exemption for wages paid to employees who are residents of the municipality.

Currently, Newark is the only municipality in the state authorized to have an employer payroll tax. No municipality other than Jersey City meets the 200,000 resident threshold as of the 2010 census, but any municipality that does going forward would be able to impose the tax.

The bill was passed by the Senate yesterday by a vote of 22-17.