This is how we can avoid another $300M tax hit on NJ businesses | Opinion

Gov. Phil Murphy’s 2024 budget offers great news in committing to sunset a 2.5% Corporation Business Tax surcharge.

While we thank the governor for following through on this commitment to New Jersey’s largest job providers who currently pay the highest CBT rate in the nation, the $53.1 billion budget fails to provide direct relief or reform for much-needed steps toward affordability for our smaller businesses.

Now is the perfect time for our policymakers to send a strong message that they understand what affordability means for our job creators. The New Jersey Business & Industry Association proposes a three-legged stool approach to achieve short term, meaningful — and deserved — help for our New Jersey businesses.

The first leg of the stool is supporting the CBT sunset and a commitment to further discussing a longer-term iterative decrease, like our neighbors in Pennsylvania are currently embarking on.

As we showed in an infographic last month, there are numerous benefits for CBT reduction, including job growth, increased salaries and reinvestment.

Unemployment insurance tax relief

The second leg is unemployment insurance tax relief for small business. For the past two years, NJBIA has urged — some might say pleaded — with policymakers to provide some kind of relief toward a massive $1 billion UI tax increase on New Jersey businesses over three years that was the direct result of extended pandemic closures and restrictions.

As has been well documented, most states used federal American Rescue Plan relief funds to partially or fully replenish their depleted state UI funds. Murphy, however, has refused to do so.

Additionally, and unfortunately, when bipartisan compromise legislation that would simply give UI tax credits for small businesses moved through the Legislature last spring, the governor blocked it from getting to his desk. This despite considerable support from both sides of the aisle.

If no action is taken by the governor or policymakers before July 1, New Jersey businesses will once again be hit with a more than $300 million UI tax increase — for something they did not create.

Our members have reported to us sticker shock on their UI bills. Worse yet, this is not a tax on businesses’ income or profits, but on jobs. Our small businesses deserve better.

More: NJ budget officials project revenue declines as senators assess budget plan

Property tax relief

There is another opportunity to help businesses with the third leg of the stool — property tax relief. We believe the ANCHOR property tax program should be extended to eligible businesses who own property in the state.

Murphy’s budget includes the continuation of the $2 billion ANCHOR property tax relief program. Just like last year, however, only homeowners and renters are eligible to apply. This is despite the fact that our businesses pay nearly half of the state’s property taxes.

Moreover, property taxes represent the biggest percentage of taxes New Jersey businesses pay, by a long shot.

Of course, it would be wonderful to see long term property tax reform more than rebates, something we advocate for tirelessly. But as long as the ANCHOR program is available, it’s only right that small businesses are included and get their fair share.

The 2024 budget has a $10 billion surplus, and there is certainly no shortage of opinions of where any extra funds should go.

But this is still a time when we see business closures on a regular basis, and we see our smallest businesses struggling to get ahead through inflation, workforce and supply chain challenges.

With two months left before the 2024 budget is finalized, this is the perfect moment in time for Murphy and policymakers to show our New Jersey businesses that stronger and fairer means affordability for them, too.

We encourage them to use all three legs of the stool to help strengthen our job creators by giving them their fair share during these more robust budget times, in turn helping to stabilize the backbone of New Jersey’s economy.

Michele Siekerka is the president and CEO of the New Jersey Business & Industry Association.

This article originally appeared on NorthJersey.com: New Jersey businesses and taxes Phil Murphy 2024 budget