New Jersey currently has 11.5% corporate tax rate.
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A Garden State lawmaker is proposing a plan that will dramatically change the current situation.
Chris DePhillips (R-Bergen), Assemblyman said that because the corporate tax is so high, families, businesses, and jobs are leaving our state.
“We need to do what North Carolina did, which is reduce the corporate business tax to 2.5%, and my bill (A1146) would do that over a 4-year period.”
Let’s do the same as them!
He pointed out that after North Carolina’s tax code was reformed to lower the corporate income tax to 2.5 percent, it had the fastest Gross Domestic Product growth and one of the fastest growing populations in the country from the first quarter of 2013 through the third quarter of 2015.
New Jersey’s business climate has been ranked last for more than a decade.
DePhillips said Trenton has become addicted to taxes and spending and “this is one very important way we can keep families and businesses and jobs in our state so we can compete with states like North Carolina, South Carolina, Florida, Pennsylvania, Delaware, those states are eating our lunch right now.”
We can’t wait
He said immediate action is needed, because Pennsylvania lawmakers recently voted to lower that state’s corporate tax rate, from 9.99% to 8.99% starting January 1, 2023, and then gradually cut the tax to 4.99% by 2031.
He said the move is designed to attract businesses “right from the Garden State, go right over the border to Pennsylvania and get a much better deal.”
Can this Republican-sponsored legislation get passed in a Democratically controlled Legislature?
He said particularly with the influx of federal pandemic funding over the past few years “there is momentum to reduce taxes, particularly business taxes because that is the primary way we can keep executives and jobs here in New Jersey.”
Under the bill businesses earning over $100,000 that are subject to the highest tax rate, would have their rate reduced gradually to 2.5% in four years. Businesses earning less than $100,000 would get to the 2.5% rate in two years.
He pointed out a 2.5% corporate business tax surcharge was levied on businesses earning over $1 million in New Jersey in 2018. It was originally scheduled to phase down to 10.5% in 2020 and back to 9% in 2021. Instead, it was extended by the Legislature in 2020 and will not sunset until Jan. 1, 2024.
David Matthau is a reporter for New Jersey 101.5. You can reach him at [email protected]
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