At a Pancakes and Policy event hosted by Jersey 1st and Americans for Prosperity-NJ on Tuesday, NJBIA President and CEO Michele Siekerka explained how a proposed $1 billion tax on New Jersey’s largest employers will impact New Jersey residents and smaller businesses.
“It’s real,” Siekerka told a crowd at the Americana Kitchen and Bar in East Windsor. “It’s a tax on every single product and service in the state of New Jersey.
“It’s called the supply chain. When something up here happens that affects the cost of business, those companies have to find a place on their balance sheet to offset that.
“It’s either within the direct workforce or they’re going to raise the prices on their products and their services or they’re going to cut in their supply chain, and it’s going to trickle down to everybody who supports those large companies,” Siekerka said.
Gov. Phil Murphy has proposed a permanent 2.5% surtax, or Corporate Transit Tax, on New Jersey businesses that earn $10 million in revenue, as part of his FY25 budget.
Should the tax come to fruition, New Jersey’s largest companies will have the largest corporate tax rate (11.5%) in the nation, by far.
“People keep saying, ‘These companies can afford it’,” Siekerka said. “It’s not about what they can or can’t afford. It’s about competitiveness and where they choose to put their next dollar to invest in.”
Siekerka also noted that the proposed surtax would be retroactive to January 1 – just as the governor sunset a previous temporary 2.5% corporate tax surtax. Gov. Murphy had spent most of 2023 committing to that sunset.
“Because this tax is retroactive, let me tell you what that means,” Siekerka said. “That means these corporations have to go back and re-state their financials for two quarters. You know who doesn’t like that? Wall Street. And Wall Street doesn’t like a permanent tax because that means they have to book it as a deferred liability from here forward.”
The conversation was moderated by Jersey 1st Founder and President Rosemary Becchi and NJBIA Chief Government Affairs Officer Christopher Emigholz and also included Fox News contributor Guy Benson and former New Jersey Senator Steve Oroho.
