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New Jersey is one of a shrinking number of states that take local employment and capital into account when determining multi-state and multinational corporations’ tax liabilities, thus placing an indirect tax on job creation and investment in the state. By moving to a single sales factor, Governor Christie is removing a barrier to firms seeking to locate and grow their business and jobs in New Jersey, while also helping retain companies with headquarters in the state.

New Jersey is one of the few states left that still imposes taxes on non-exempt farm cooperatives. Governor Christie stops this practice.

Under current law, qualified R&D spending in New Jersey may be used to offset up to 50% of corporate tax liability. Governor Christie’s proposal allows critical, economically-beneficial research and development spending in the state to be used to offset all of the corporate tax liability. This will help New Jersey regain and grow its reputation as a home for innovation.

Every one of New Jersey’s neighboring states has lower S-corporation minimum taxes, while three states have no minimum tax whatsoever. Governor Christie’s proposal will increase New Jersey’s competitiveness by leveling the playing field, making New Jersey more attractive to small and startup businesses.

  • Unlike the federal government and most other states, New Jersey penalizes small businesses by only allowing losses in each category of income to be offset against income in the same category. Current law also does not allow losses to be carried forward and used to offset gains in subsequent years. This discourages diversified entrepreneurship and burdens loss-generating business startups. Governor Christie’s plan provides a smooth transition toward a fairer method for taxing entrepreneurs and small businesses.

This is an unnecessary and harmful tax on business technology improvements and modernization. Governor Christie proposes the removal of this disincentive to business investments and technology improvements to spur productivity-enhancing business reinvestment.

The archaically low threshold for New Jersey’s estate tax — less than the value of many middle-class homes — encourages small businesses and their owners to shut down and leave their state. The current estate tax also deters small and family-owned businesses from relocating their businesses to New Jersey. Governor Christie proposes an increase in the ceiling on the exemption amount, lowering incentives for businesses to close and increasing New Jersey’s attractiveness to small businesses.

). Tax relief in the form of energy cost savings, first promised in 1997, will finally occur beginning on January 1, 2012. The TEFA was created as a temporary tax as part of the shift from a gross receipts tax on energy to a combination of Corporation Business and the Sales and Use taxes. The original phase-out schedule for the assessment had it ending on December 31, 2002; however, subsequent Governors and Legislatures extended the sunset.


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