| A collection of more than 100 business, labor and nonprofit groups have sent a letter to all members the New Jersey Legislature urging them to oppose Gov. Phil Murphy’s proposed $1-billion-plus business tax increase on business in the FY25 State Budget.
The governor’s proposed 2.5% Corporate Transit Fee is a permanent and retroactive restoration of an expired Corporate Business Tax surtax on corporations with more than $10 million in earnings – returning New Jersey to the highest CBT tax rate in the nation, by far, and the only state with a double-digit CBT rate.
“This action further hurts New Jersey’s economic competitiveness for the creation and attraction of jobs and capital because corporations can pick and choose their investment locations based upon where they get the best return on investment,” the NJBC wrote.
“New Jersey’s business climate already has an unrelenting tax environment. We are the only state in the nation that is in the top tier of the four major taxes…. If you in the State Legislature want to improve our economy and organically grow our revenues to be able to pay for things like Stay NJ, then this tax increase is certainly not the answer.”
This coalition stated that the “massive 20% business tax increase” is especially difficult to understand and harmful to the state’s business climate, “because Governor Murphy publicly acknowledged in a radio interview just weeks before his budget proposal that New Jersey’s corporate taxes were already high and that the corporate business surtax hurt our state competitiveness.
“What changed?” the coalition asked.
The coalition also noted that the proposal to dedicate a new business tax to NJ TRANSIT was poor public policy, for three major reasons:
- “CBT is a very volatile revenue, one of the must unstable revenue sources in the New Jersey state budget. If we truly value transportation, then we should find a stable revenue source for it.”
- “There is no nexus or a weak nexus at best between the CBT and transportation in many areas of New Jersey, and no other state dedicates a corporate tax to a mass transit agency. Why would CBT payers in South New Jersey or Northwest New Jersey pay for a NJ TRANSIT system they and their employees do not use?”
- “A ‘dedication’ implies permanence, and making a CBT increase permanent exacerbates its negative impact on businesses and competitiveness. Those affected by this new 20% business tax get a double hit that was not the case with the prior temporary surtax. It is a cash tax increase and also a hit to a company’s balance sheet and stock value for publicly traded companies.”
Similarly, the NJBC objected in the letter to a new a ‘Warehouse Fee’ tax increase on New Jersey’s important logistics industry, which would likely be passed on to the consumer.
“This tax will further hurt the competitiveness within many important sectors of our economy – retail, manufacturing, logistics, and other industries that work with them,” the coalition wrote.
“In practicality, this is a tax on every item that goes into any box in New Jersey. This ill-conceived tax is punitive and does not seem to serve any public policy goal given the scant detail that has been provided on how the money will be utilized. As such, this tax must also be rejected.”
To read the full NJBC letter to the State Legislature, click here. |
