The New Jersey Chamber of Commerce strongly disagrees with recent comments criticizing Gov. Murphy’s verbal support of ending the state Corporation Business Tax (CBT) surcharge when it expires at the end of 2023. We applaud him for taking this position, especially since the CBT surcharge was already extended once.
It is critical that our government leaders be true to their word, and allow the surcharge to sunset. Businesses located here, and those considering moving here, seek reliability. They seek state leaders that are true to their commitments – and enact long-term solutions to fiscal problems, not one-time fixes, which the surcharge certainly was. For those complaining about businesses not paying their fair share, even with the CBT surcharge expiring, New Jersey will still be in the top four in the nation, at 9%, when it comes to CBT rates. In addition, many of our Chamber’s member companies must now adhere to the new Inflation Reduction Act rules and will be paying a 15% corporate alternative minimum tax, thus making tax relief from the sunset more vital.
Looking down New Jersey’s fiscal road, if we are to maintain the spending levels established by recent state budgets, we need to make strategic investments in our already struggling businesses now so they can grow, and the economy can grow with them. Tax relief is at the top of that list.
I’m hearing from many of my member companies that 2023, and potentially beyond, is going to be difficult – with a need to cut back on expenses. This could include philanthropic spending, which New Jersey companies generously donate – to the tune of hundreds of millions of dollars – to non-profits that support social causes and the arts. Extending the surcharge, the slowing economy, new Inflation Reduction Act rules and, actually raising taxes on companies, as some are calling for, all combined, might severely impact corporate giving and in turn affect the less fortunate that depend on non-profits. Several of the organizations calling for the continuation of the surcharge, some of who receive corporate donations, should be concerned by that possibility.
The Governor has a difficult decision – and his recent comments are correct. Honoring the sunset provision and his action would benefit more citizens than the alternative. It will enhance our future economic growth by making our state more competitive and more affordable. This will also create confidence that our leaders honor their commitments, which results in the reliability that businesses seek.