Those of us involved with New Jersey’s shift to combined reporting a few years ago will remember (but probably want to forget) the last-minute craziness that was the back-and-forth between Gov. Phil Murphy’s office, the Legislature and the corporate community during a 2018 summer weekend in the State House.
That haphazard manner of writing a new and complicated tax law left the need for some technical corrections.
NJBIA and some of our member corporate tax experts met with staff from the New Jersey Treasury’s Division of Taxation last year to iron out these technical corrections. The two sides saw a need to adjust the compliance, reporting and administrative components of the complex law, and they did not pursue any changes of a policy nature that would impact revenues and that were not mutually agreed to by both sides.
This resulted in bill language that NJBIA started to advocate for in the Legislature shortly before the pandemic, but it became less of an immediate concern once COVID-19 hit with its devastating impact on business.
There was a new opportunity to insert the technical corrections language into the Corporation Business Tax (CBT) increase that was part of the FY2021 state budget signed into law last week. Even though NJBIA opposed the tax increase, we asked that the rate increase be temporary, which lawmakers agreed to, and that the technical corrections be inserted, which lawmakers did not do.
The bright side on this language is that Senate Budget & Appropriations Committee Chairman Paul Sarlo, (D-36), committed publicly that the Senate would work on the technical corrections bill in October at its first post-budget meeting, and he has since introduced the bill, S-3007.
NJBIA has been meeting again with staff from the Division of Taxation to explore if any more adjustments are necessary to this language that would help many corporations more easily comply with the law, and NJBIA looks forward to supporting the bill many years in the making when Senate committees resume after the budget.