NJBIA: Budget Proposals with More Tax Increases Moving in Wrong Direction
NJBIA President & CEO Michele N. Siekerka, Esq., issued the following statement Thursday regarding the FY2019 state budget negotiations.
“Negotiations are clearly headed in the wrong direction. Instead of focusing on New Jersey’s economic competitiveness and jobs, the Legislature is now poised to possibly vote on even more tax increases.
“Lengthening the CBT surcharge to four years, extending the sales tax to include vacation rental homes and doubling the realty transfer fee will make New Jersey less affordable and less competitive.
“The budget approved by the Legislature on June 21 would give New Jersey the highest corporation business tax (CBT) in the nation: 13 percent for companies with more than $25 million in income and 11.5 percent for companies with more than $1 million in income. Yesterday, the situation went from bad to worse when legislators proposed an additional $360 million in tax increases by changing the two-year sunset provision in the CBT hike to four years, expanding the sales tax to include vacation rental homes at the shore, and doubling the realty transfer tax on sales of properties over $1 million.
“Extending New Jersey’s 6.625 percent sales tax to shore vacation homes and other short-term rentals would make New Jersey an outlier in our region and hurt the tourism economy that has just started to recover after Superstorm Sandy. Similarly, the proposed realty transfer fee of 2 percent on properties over $1 million would also give New Jersey the highest realty transfer tax in the region – exceeding even New York where the fee for properties over $1 million is 0.4 percent to 1.4 percent.
“NJBIA has long maintained that New Jersey has a spending problem, not a revenue problem. Proposals such as the millionaires tax and CBT surcharge try to balance the budget on the backs of job-creators and will only make New Jersey less competitive and more unaffordable.”