NJBIA is supporting a bill that attempts to prevent New York from taxing New Jersey workers who have stopped commuting into New York City or other parts of the Empire State since the pandemic.
Bill S-3128 (Lagana, D-38; Bramnick, D-21) was amended by Senate on Thursday, putting it place for final passage at the next scheduled legislative session on Friday, June 30.
New Jersey residents currently pay income tax to their employer’s state and receive a credit from New Jersey so they’re not double-taxed on the state level. But now, with so many more residents working remotely from their homes in New Jersey, instead of offices in New York, the Garden State wants those income tax dollars.
“We have a lot of people that have not worked in Manhattan for a day in years and yet they’re paying all of their income taxes to New York State,” NJBIA Chief Government Affairs Officer Christopher Emigholz said. “And we’re not seeing any of that.
“There are estimates that it could be billions of dollars that New Jersey is losing out on. And that can go toward a lot of important things that we talk about in the scope of the budget process.”
The legislation would not affect New Jersey’s reciprocal tax agreement with Pennsylvania, under which compensation paid to Pennsylvania residents employed in New Jersey is not subject to New Jersey income tax. Similary, New Jersey residents employed in Pennsyvlania are not subject to Pennsylvania income tax either – only New Jersey income tax. There is no such reciprocity agreement with New York.
Companion bill A-4694 (Tully, D-38; Swain, D-38) was passed unanimously by the full Assembly on May 25.
