Happy Tax Day…oh wait! 🙂
I want to start by saying that I hope you and your families are staying healthy and safe in this unprecedented public health crisis with which we are all struggling. I know many of your businesses must be impacted, and I hope they are faring as well as possible.
Many of you on this committee have been getting email updates from NJBIA and other organizations to help you navigate these uncertain times, and I wanted to add to that with this hopefully helpful COVID-19 update focused on taxes.
First of all, I wanted to let you all know that Governor Murphy signed the S-2338/A-3918 (Sarlo/Oroho/Bucco/Pintor Marin/Wirths/Burzichelli) “COVID-19 Fiscal Mitigation Act” on Tuesday, April 14, 2020. You can see Governor Murphy’s explanation of the bill in his press release a few hours after it passed the Legislature where he expressed his intention to sign it at: https://nj.gov/governor/news/news/562020/approved/20200413c.shtml. NJBIA supported this bill because it will provide relief to millions of taxpayers throughout our state. We did ask for amendments that would have clarified that more taxpayers would benefit from the bill and all tax filings/payments in between April 15 and July 15 were also covered, but we are hopeful that some of those concerns could be addressed administratively. This bill also extended Fiscal Year 2020 an extra 3 months so that it will now end September 30, 2020. This will give the State of New Jersey extra time to allow for the extended tax payments and navigate the uncertain budget issues caused by this crisis in closing out FY20 and starting FY21. NJBIA will stay on top of what this could mean for spending and taxes in both fiscal years.
Speaking of the administration of this tax deadline extension, guidance from Treasury’s Division of Taxation on this change can be found at https://www.state.nj.us/treasury/taxation/covid19.shtml. This webpage contains information on the new due dates, FAQs on withholdings and other resources. Tax professionals did express interest in how the rise of remote workplaces from home would impact payroll tax withholdings if the home and office were in different states, but at this webpage, you can see that New Jersey determined that during this “temporary period of the COVID-19 pandemic, wage income will continue to be sourced as determined by the employer in accordance with the employer’s jurisdiction.”
In addition to state changes, the Federal Government also extended its tax deadlines from April 15 to July 15. You can learn more about that and other federal tax changes at the IRS website at https://www.irs.gov/coronavirus/coronavirus-tax-relief-for-businesses-and-tax-exempt-entities.
In the federal CARES Act, there were also several business tax changes that could impact your federal taxes (state too if the state conforms to certain federal tax laws), including temporary rollbacks of some unfavorable provisions of the federal Tax Cut and Jobs Act relating to net operating losses (NOL) and business interest limitations. You can learn more about them at https://taxfoundation.org/cares-act-senate-coronavirus-bill-economic-relief-plan/.
I also want to point out to this committee the work that NJBIA has been up to helping busineses during this crisis. We have a website dedicated to helping businesses through COVID-19 at https://njbia.org/coronavirus/. Additionally, you can see the letter and policy request list sent to policymakers from the Business Coalition that NJBIA has worked with to advocate for businesses during this pandemic at https://njbia.org/wp-content/uploads/2016/05/New-Jersey-Business-Coalition-COVID-19-Legislative-and-Administrative-Relief-Package-1.pdf. Towards NJBIA’s continued advocacy on behalf of business, please let me know if you have additional tax and economic development ideas to help businesses stay afloat during this pandemic and also more rapidly recover after this crisis passes.
Lastly, I wanted to make you aware of a new regulatory proposal from the state Division of Taxation regarding receipts from services that can be found at https://www.nj.gov/treasury/proposed_rules/PRN%202020-026%20(52%20N.J.R.%20508(a)).pdf. Originally the written comments had to be submitted to Treasury at Tax.RuleMakingComments@treas.nj.gov by May 15, 2020, but Executive Order #127 issued yesterday is delaying all rulemaking until 90 days after Governor Murphy lifts his public health emergency declaration. Please let me know if you have any specific comments that you would like NJBIA to submit to support anything your business may be doing.
Please email me at email@example.com if you have any questions or want to weigh in on NJBIA’s advocacy on any of the above.
Thank you and I look forward to working with you to continue to help your business in these challenging times.
–Christopher Emigholz – NJBIA, Vice President of Government Affairs