EAlert: NJ Tax Update

New Jersey Governor, Phil Murphy, signed a $37.4 billion budget last night, avoiding a government shutdown. This year’s budget is 8% higher than last fiscal year’s budget.

The Fiscal Year 2019 budget highlights include:

  • Millionaires Tax -The top tax bracket increased from 8.97% to 10.75% for those with income of $5 million and more. The increase in the top rate makes New Jersey the second highest in the nation.
  • Corporate Business Tax (CBT) – Increases the Corporate Business Tax for the next four years. Companies that pay the tax will see a 2.5% increase for the next two years and a 1.5% increase for the following two years.
  • Uber/Lyft Tax – A new tax on ride-sharing services. Depending on the type of service, the new tax will cost consumers between 25 and 50 cents per ride.
  • Sales Tax – An increase back to a 7% sales tax was NOT included in the FY19 budget as the recent U.S. Supreme Court case South Dakota V. Wayfair, regarding the state’s ability to impose a sales tax for online shopping, will eventually generate additional revenue.
  • Earned Income Tax Credit – An increase in the Earned Income Tax Credit will assist households with family incomes under $60,000.
  • Property Tax Deduction Increase – In Gov. Murphy’s Budget Address he expressed support for an increase in the state’s property tax deduction from $10,000 to $15,000. That increase was approved by the Legislature and awaits the Governor’s approval.
  • Tax Amnesty Program – As part of the budget negotiations, residents owing back taxes to the state will now have the opportunity to pay off their debt without any penalty or interest costs.

Jeffrey G. Cohen Jeffrey G. Cohen, CPA is the Partner-in-Charge of Tax Services at Grassi. With over 30 years of experience, Jeff specializes in serving companies within the Manufacturing and Distribution Industry, with an emphasis on the Food & Beverage and Pharmaceutical sectors. A leading tax expert in the New York Metropolitan area, Jeff has enabled his clients to realize significant tax savings through proper Income and... Read full bio