More than just a broken promise, the proposed business tax increases in the governor’s proposed FY25 state budget set “terrible policy” that hurts the state’s economic competitiveness, NJBIA President & CEO Michele Siekerka said on a recent episode of “New Jersey Business Beat with Raven Santana.”
Businesses were promised that a temporary 2.5% surcharge imposed on top of the permanent 9% Corporation Business Tax would sunset as scheduled on Dec. 31, 2023. Now in his new budget proposal, Gov. Phil Murphy is proposing a permanent 2.5% corporate transit tax that is retroactive to Jan. 1, essentially replacing a temporary 2.5% corporate income tax surcharge with a permanent one.
“The business community needs predictability,” Siekerka told Santana, noting that companies were counting on the repeal of the temporary surtax to make investments in their facilities, workforces and communities. “And now the rug has been pulled out from underneath them.”
New Jersey business currently pay the fourth-highest business tax in the nation, which will rise to the highest at 11.5% if the Legislature approves the governor’s plan. This puts New Jersey businesses at a competitive disadvantage to states in the region that have lower corporate taxes, income taxes and property taxes, Siekerka said.
The governor’s proposed tax on trucks using warehouse facilities is also bad policy, she said. Moreover, the proposal would affect not just warehouses, but thousands of manufacturing facilities across the state, she said.
“We’re a logistics state and now want to take a thriving industry and take them for granted and throw another tax on them? It’s just wrong,” Siekerka said.
“This is going to fall back on the consumers,” she added. “I want to emphasize that this winds up being a tax on consumer products.”
As for next steps, Siekerka said “the ball is in the Legislature’s court.”
“They will drive the next part of this process and we are out there speaking with our legislators; we are testifying at the budget hearings … we can’t discuss anything else in the budget we don’t get over this significant hurdle for the business community.”
To watch the March 9 interview on NJ Spotlight News, go here.
