The New Jersey Chamber of Commerce is tracking legislation and other items important to the business community:
FISCAL 2013 STATE BUDGET
On June 29, Governor Christie signed into law S-2013, the $31.7 billion fiscal 2013 state budget bill. The budget provides for a surplus of more than $600 million. The budget continues the phase in of tax reforms that were initiated during last year's budget cycle, providing $347 million in business tax relief, including:
- the single sales factor allocation formula, which eliminates property and payroll as factors when determining the Corporation Business Tax, and bases it solely on sales.
- the provision for businesses to offset losses from one category of income to another.
- the 20-year carryforward of net operating losses for business owners whose business taxes are paid through their personal income taxes.
- the 25 percent reduction in minimum tax paid by S-corporations.
- the increase in the Research and Development Tax Credit from 50 percent to 100 percent, which aids critical research in New Jersey.
- full funding for the Technology Business Tax Certificate Transfer Program.
- the phasing out of the Transitional Energy Facility Assessment, which was originally scheduled to expire in 2002 but had been extended every year until 2012.
Governor Christie called the Legislature into special session on July 2 to address the members and push for immediate tax relief. The budget passed by the Democrat-controlled Legislature sets aside $183 million in property tax relief to be allocated to residents contingent on improved revenue collections.
The Governor conditionally vetoed A-3201, which increases the income tax rate from 8.97 percent to 10.75 percent on taxpayers with income greater than $1 million, contingent on enactment of property tax relief legislation (A-3202, which was vetoed by the Governor.)
The State Chamber strongly opposed the legislation to increase the income tax rate on high earners because this increase would discourage business owners from creating and retaining jobs and expanding their investments in New Jersey, and would hurt our state's competitiveness.
The Governor sent A-3201 back to the Legislature to consider his changes, which essentially amount to Senate President Sweeney's tax relief plan. The amended legislation provides New Jersey residents with household incomes up to $400,000 with an income tax credit equal to 10 percent of their property tax bills, up to $1,000 when fully phased in over a four year period.The amended legislation also includes a full restoration of the Earned Income Tax Credit.