Currently, New Jersey has the highest corporate tax rate in the country at 11.5%.

A Garden State lawmaker is pushing a plan to drastically change the situation.

Assemblyman Chris DePhillips, R-Bergen, said because corporate taxes are so high, families, businesses and jobs are leaving our state.

“We need to do what North Carolina has done, which is reduce the corporate tax to 2.5%, and my bill (A1146) would do that over a 4-year period. “

let’s do what they did

He pointed out that after reforming the North Carolina tax code to lower the corporate income tax to 2.5%, it had the fastest growth in gross domestic product and one of the fastest growing populations in the country from the first quarter of 2013 to the third quarter of 2013. 2015.

Meanwhile, New Jersey has ranked last in the nation for business climate for more than a decade.

DePhillips said Trenton has become addicted to taxes and spending and “it’s a very important way to keep families, businesses and jobs in our state so we can compete with states like North Carolina, Carolina South, Florida, Pennsylvania, Delaware, those states are eating our lunch right now.”

We can’t wait

He said immediate action was needed as Pennsylvania lawmakers recently voted to lower that state’s corporate tax rate from 9.99% to 8.99% effective Jan. 1, 2023, and then gradually reduce the tax to 4.99% by 2031.

He said the move was designed to bring business “straight from the Garden State, straight across the Pennsylvania border, and get a much better deal.”

Can this Republican-sponsored legislation pass in a Democratic-controlled legislature?

He said in particular that with the influx of federal pandemic funding over the past few years “there is momentum to cut taxes, especially corporate taxes, because that’s the primary way to keep executives and jobs here in New Jersey”.

Under the bill, companies earning more than $100,000 that are subject to the highest tax rate would see their rate reduced gradually to 2.5% over four years. Companies earning less than $100,000 would hit the 2.5% rate in two years.

He pointed out that a 2.5% corporate tax surtax was imposed on businesses earning more than $1 million in New Jersey in 2018. It was originally slated to rise to 10.5% in 2020 and return to 9% in 2021. Instead, it was extended by the Legislative Assembly in 2020 and will not end until January 1, 2024.

David Matthau is a reporter for New Jersey 101.5. You can reach him at [email protected]

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