As the state budget discussions in Trenton continue, the New Jersey Chamber of Commerce is on record as opposing several proposed tax increases, including the Corporation Business Tax (CBT) and the millionaire’s tax. However, as indicated clearly in Senate President Sweeney’s press conference yesterday, some form of tax increases will be part of the fiscal year 2019 budget.
Facing this reality, tax experts from member companies of the State Chamber have been working with government leaders to minimize the proposed CBT increase. This increase is a complex proposal with some very damaging consequences to New Jersey’s economy and to the state’s largest employers headquartered here or with a large presence here.
We are pleased that Senate President Sweeney and Assembly Speaker Coughlin recognized that the CBT increase, as originally proposed, would particularly penalize these large employers.
Both houses of the Legislature attempted to minimize the negative impact of the increase on Monday by passing legislation which eased a portion of the CBT increase known as the “Dividends Received Deduction.”
However, this modification would still lead to well over $400 million in tax increases for several of our largest employers just for the 2017 tax year alone. Add the substantial tax burdens that would be placed on these companies going forward and it would deal a severe blow to job growth in our state.
Accordingly, the N.J. Chamber of Commerce and the tax experts from its member companies urge our lawmakers to institute a $5 million cap, or similar form of acceptable measurable limitation, per legal entity on the “Dividends Received Deduction” tax.
Businesses need to deal with certainty, and this proposed action would meet that requirement. This would also satisfy the numbers in the Legislature’s budget proposal.
Although the State Chamber remains opposed to any CBT increase, our involvement and that of the tax experts from our member companies took place to minimize the impact of a CBT increase on our members, the business community and the state’s economy if some form of the CBT becomes part of the budget.