Improve NJ's Business Climate? They're On It!

In what has become an unfortunate annual occurrence, New Jersey has yet again ranked dead last when it comes to a healthy business environment according to the Tax Foundation’s 2023 State Business Climate Index. To help change course, longtime small business advocates Assemblyman Gerry Scharfenberger and Assemblywoman Victoria Flynn (Monmouth – R’s) have introduced new legislation (A4907) that will lower New Jersey’s Corporate Business Tax (CBT) as well as end the Business Surcharge Taxes that limit potential growth:

 

“With New Jersey consistently rated near or last in the nation in business environment, it is imperative that we do something to improve business attraction and retention. Cutting the highest in the nation corporate business tax (CBT) would go a long way towards improving New Jersey for businesses to open, operate and flourish here,” Assemblyman Scharfenberger said. “It’s a multi-faceted approach and now more than ever we need to help our struggling local businesses and residents with real economic recovery proposals. A reduction in the CBT would increase revenues over time as more businesses would choose to open and expand in a more favorable economic climate, thus leading to a stronger economy that benefits all.”

 

“The current corporate tax rate disincentives business investment in New Jersey and forces NJ-based industries to move out-of-state when the financial burden becomes unsustainable. In fact, we know that other states are actively recruiting NJ corporations to set up their shops in more tax friendly areas,” stated Assemblywoman Flynn. “Members of the business community plead with state leaders to implement corporate tax reforms so that New Jersey businesses may be able to compete. We cannot continue down this path or we will face an assured fiscal disaster, wreaking havoc on residents as well as businesses.”

 

The bill as drafted would reduce New Jersey’s CBT to 7.5% (currently 9%) as well as remove the 2.5% surcharge that was added on taxpayers with corporate tax liabilities. Through these reductions, it is believed that that these changes would nurture more sustainable economic growth and reduce costs on residents by increasing ratables: