Saying New Jersey’s small business community needs more help — and lower taxes — two Republican members of the Assembly have introduced legislation that would lower the state’s corporate business tax as well as end the business surcharge tax.
The bill is not expected to go far, as Democratic leaders have shown little interest in lowering the CBT — or helping rebuild the Unemployment Insurance fund — even after record revenues.
That didn’t slow Assemblyman Gerry Scharfenberger and Assemblywoman Victoria Flynn (both R-Middletown), who said they feel the state is not business-friendly. They point to the recent 2023 State Business Tax Climate index, which had New Jersey ranked 50th.
The bill, as drafted, would reduce New Jersey’s CBT to 7.5% (it’s currently 9%) as well as remove the 2.5% surcharge that was added on taxpayers with corporate tax liabilities.
Scharfenberger and Flynn believe these changes would nurture more sustainable economic growth and reduce costs on residents by increasing ratables.
“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,” Scharfenberger said. “Cutting the highest-in-the-nation corporate business tax would go a long way toward improving New Jersey for businesses to open, operate and flourish here.”
Scharfenberger said the cut is just a start.
“It’s a multifaceted approach and, now more than ever, we need to help our struggling local businesses and residents with real economic recovery proposals,” he said. “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.”
Flynn said a change is needed.
“The current corporate tax rate disincentives business investment in New Jersey and forces New Jersey-based industries to move out of state when the financial burden becomes unsustainable,” she said. “In fact, we know that other states are actively recruiting New Jersey corporations to set up their shops in more tax-friendly areas.
“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.”
A survey released this week by the New Jersey Business & Industry Association said business owners in the state overwhelmingly felt the Gov. Phil Murphy and Legislature were not doing enough to help them.
