February 24, 2004
New Jersey businesses face another huge tax hike
Businesses in New Jersey, still recovering from huge corporate tax increases in 2002, will pay about $325 million more in business taxes under the 2005 state budget, according to a new report by the New Jersey Business and Industry Association (NJBIA).
“This is supposed to be a ‘good news’ budget where revenues are up and spending will be increased. But there’s no good news here for the business community,” NJBIA President Philip Kirschner said. “Spending is increased and it is New Jersey’s employers who will be footing the bill.”
The budget proposal, unveiled today by New Jersey Governor James E. McGreevey, would continue to suspend net operating loss deductions, and would not allow companies to depreciate new equipment at the same rate as the federal government, the report found.
The report pointed out that the provisions included in the budget are on top of the 2002 "New Jersey Plan" which nearly doubled New Jersey's corporate business tax.
The Business Council has repeatedly voiced concerns over the New Jersey plan, and remains opposed to proposals by unions and other pressure groups to enact similar tax increases in New York.
In a March 2003 letter to lawmakers, Business Council President
Daniel B. Walsh cited New Jersey as an example of what not
to do to business.
"The damage to New Jersey's business climate was immediate, and we New Yorkers leapt to take advantage of it," Walsh wrote. "Economic developers across New York (and elsewhere) are still using this misstep as they seek to lure businesses out of New Jersey."