NJBIA President and CEO Michele Siekerka says the governor’s plan for a permanent 2.5% tax on corporations to fund NJ TRANSIT is worse than the temporary surcharge on corporate income tax it replaces, and she is calling for legislators to do better for New Jersey business.
In an op-ed published Monday in ROI-NJ, Siekerka pointed out the proposed “Corporate Transit Fee” outlined recently in the governor’s FY25 budget proposal to the Legislature is “just a pretty name for a major tax” and it would permanently reestablish New Jersey as the state with the nation’s highest top corporate tax rate (11.5%).
“We have already heard directly from our corporations,” Siekerka wrote. “When a tax is permanent, it’s a double hit to publicly traded companies. First, there’s a cash tax increase. Then there’s a hit on deferred tax liabilities that will negatively impact their balance sheet every quarter the change is enacted.
“Put simply, this is a worse tax that will impact the cash they have and the investments they can make,” Siekerka wrote.
Siekerka also questioned why a permanent transit tax – retroactive to Jan. 1 when the temporary CBT surcharge expired – is needed now. The state budget has billions in surplus funds and NJ TRANSIT won’t face its budgetary fiscal cliff until next year, she said.
Moreover, NJ Transit received $4.5 billion in federal pandemic aid, and it was possible for the agency to receive more under the federal 2021 Infrastructure Investment and Jobs Act.
“Yet, the decision is to reverse course and penalize our businesses now, with billions of surplus dollars available in the budget. What kind of message does that send?” she asked.
The state’s largest job creators have had “the rug pulled out from under them” because the governor has gone back on his pledge to return the corporate tax rate to 9%, she said.
Go here to read the entire op-ed.
