NJBIA Chief Government Affairs Officer Christopher Emigholz issued the following statement regarding legislation signed by Gov. Phil Murphy today that reforms New Jersey’s corporate tax policies to be more competitive with other states by changing the way global intangible low-taxed income (GILTI) is treated under state law.
“NJBIA thanks Governor Murphy for signing this bill into law today, as well as Treasury and the Division of Taxation for working with us on this complex legislation to bring more fairness and competitiveness within our corporate tax structure.“This was complicated, but compromise, legislation that we worked on with the administration since last summer. We appreciate that partnership over the past year and the amount of time dedicated to working on this important bill.“Most states do not tax income earned abroad by U.S.-controlled corporations as aggressively as New Jersey had. Neighboring Pennsylvania does not tax GILTI at all, while New York and Connecticut only tax 5% of GILTI.“New Jersey, however, was a national outlier that only allowed corporations to deduct 50% of GILTI from their tax base.“Aside from the questions on the appropriateness of states taxing foreign income at all, it was always our opinion that New Jersey should not be more aggressive on this tax than any other state in the nation. Especially when we are fortunate to have as many multinational corporations located and creating great jobs here.”“Another bonus to the business community is the law also makes the tax code more taxpayer friendly in the way it treats net operating losses (NOLs) by allowing the sharing of NOLs by combined businesses so that they are not locked away or captured.”
