NJBIA recently held an NJBIA/State Chamber Joint Taxation & Economic Development Policy Committee Meeting with the following guest speakers:
- Marita Sciarrotta, Director, New Jersey Division of Taxation
- Andrew Jones, Senior Associate, MultiState
- Amirah Hussain, Director of Government Relations, NJ State Chamber of Commerce
- Christopher Emigholz, Chief Government Affairs Officer, NJBIA
Here are some excerpts from the meeting:
Sciarrotta on cooperative tax administration: "My philosophy about the Division of Taxation (and) what my vision is, where we're going and how we can improve with the assistance of the NJBIA. As a partnership, I think this is one of the most important and defining relationships that we have.
Being able to speak directly to your membership and to receive candid responses, to get the questions back and feedback and have an open dialogue is really critically important.
When I first became a field investigator, I was very struck by this 'us versus them' dynamic that existed. There were times when it was a pretty adversarial relationship, and adversarial relationships beget deception. They can thwart transparency, they create much more work and expend way more energy than promoting compliance.
"There is a hard way, and then there is an easier way to accomplish our goals on both sides of the taxation coin. That is, those who pay tax and those who collect it. Having better opportunities to engage, more open and transparent information and guidance, to seek not to agitate, but to inform, to guide rather than force, has been the hallmark of the last 10 to 15 years here.
Sciarrotta on Division of Taxation's mediation pilot and STAR portal: "The Division of Taxation launched a mediation program last year to augment some of the other means that we have of communicating and resolving tax matters, particularly those that come out of audit.
"Today, 26 applications have been filed. Twenty-three have been accepted… So far, we have had 17 mediated settlements and closing agreements.
"At the end of October, after the extension for most CBT returns and the sales tax returns are due, there will be a pause on your access to our ordinary online systems for about five working days while we transition and move all the data from the old legacy system into this new web-based system that we are using, this entity we call STAR."
Jones on national state tax trends: "One big caveat with all revenue and tax policy questions right now is the One Big Beautiful Bill Act. This is going to be a fairly decent shift of responsibility for things like Medicaid and SNAP from the federal level to the state level.
“This is going to take a little bit of time to show up in the state budget, so (…) it's at the end of the decade and pushing into the 2030s that stuff really will start to show up in these state budgets.
“Legislators across the country really don't feel like they know what's coming. We’ve talked to folks from a bunch of different states … their legislators are not trusting what the states have put out at them. They don't really know what the federal government will do in the future … after November (mid-term elections).
Jones on data centers and digital economy taxes: "One of the big things is the digital economy. The biggest is the Maryland digital advertising tax was struck down in tax court just over a month ago. This was a separate tax on digital advertising that was passed in 2021.
“This year, it was followed up by Utah and Illinois as well, and now we are probably going to see similar lawsuits following Maryland's state there.
"Last big trend of the year is data centers. This has become, I think, the issue of the year. It is playing out in every election across the country. Just about every state had either a bill or some sort of executive action on data centers.
"We also have states who are looking at how we can regulate data center energy use, or how we can regulate their water use. States like Florida, where energy is a little more tight, are looking at how they can make sure this is not going to affect residential ratepayers."
Emigholz on major business tax concerns: "The biggest one is a temporary pause on NOLs over $1 million that the business community pushed back on.
“The most anti-business part of the state budget that ultimately became law with some moderation was the Medicaid assessment. This is a $145 million assessment. It basically assesses your company if you have more than 50 people, including dependents of your employees, on Medicaid.
"The corporate transit fee, the temporary 2.5% surcharge, expires on December 31, 2028. This is the 2.5% surcharge that gives us that 11.5% corporate tax rate, which is the highest in the nation by far."
Hussain on New Jersey's data broker bill: "Essentially, this is a data privacy law which would create a public registry of data brokers and data collectors that sell or license New Jersey residents' personal data.
"Initially, this was a bill that was supposed to just be targeting data brokers, and we may not have had as much of an issue with this, but the language was amended to include all data collectors, which really entails all types of organizations, companies and businesses. Even the local coffee shop collects data from their customers in order to enroll them in loyalty programs.
"The annual registration and fees are starting at $5,000 and go as high as $1.5 million. Other states that have enacted similar legislation have had fees much lower, generally just low enough to cover the cost of oversight and administration."
Hussain on consumer pricing: "The Fair Price Protection Act essentially prohibits businesses that sell foodstuff from using any types of personal data or algorithms to charge shoppers different prices for the same food.
“The most problematic piece of this legislation is that retailers and grocers are using customer data to give customers personalized coupons to get them in the door and help them save on things they regularly purchase.”
To join an NJBIA Policy Committee, click NJBIA’s advocacy page here and scroll down to the middle of the page.
