DePhillips denounces Dems’ plan to extend corporate tax surcharge

DePhillips denounces Dems’ plan to extend corporate tax surcharge

Assemblyman Christopher DePhillips

TRENTON, N.J. – The top Democrat in the Senate last week suggested extending a corporate surtax during the lame duck session to fund NJ Transit, which Assemblyman Christopher DePhillips called predictable, but devastating for New Jersey’s economy. DePhillips, a longtime sponsor of legislation to cut the corporate business tax, says the extension rips the rug out from under New Jersey’s business leaders who can easily set up shop in more tax-friendly states.

“New Jersey’s convenient location and educated workforce is not the advantage that it used to be, especially when neighboring states are realizing the benefits of lowering their corporate taxes and New Jersey Democrats are intent at raising taxes and breaking commitments to the business community,” DePhillips said (R-Bergen).

The 2.5% surcharge on businesses earning over $1 million pushes New Jersey’s corporate tax rate to 11.5%, the highest in the nation. The 2.5% surcharge is scheduled to expire on Dec. 31, but Senate President Nicholas Scutari said he will seek to extend it to provide a billion-dollar funding stream for NJ Transit.

“Instead of ensuring NJ Transit is run efficiently and the state’s services are operating effectively, Democrats want to raise taxes and spend more money,” DePhillips said. “Ripping the rug out from under CEOs at these big companies with the means to easily relocate to a more business-friendly state will not only hurt New Jersey’s bottom line, but also regular hardworking families who will either be forced out of a job or out of New Jersey.”

The latest figures from the U.S. Census Bureau support his point. Residents are leaving New Jersey to live in states with lower taxes like Florida, Texas and South Carolina. An estimated 64,231 residents moved out of New Jersey between July 1, 2021 and July 1, 2022. When including the number of people moving into the state, New Jersey had a net migration loss of 24,843.

“Even if the corporate tax rate returned to 9% as mandated by statute, New Jersey would still have the fourth highest rate in the nation. I have contended that not only do we need to let the surtax sunset, but we need to lower the corporate tax rate if we want to be competitive,” DePhillips said. “The fact that Pennsylvania agreed to lower their rate to 4.99% just hastens the need to cut taxes in New Jersey.”

DePhillips sponsors a bill (A1146) to gradually lower the New Jersey corporate business tax to 2.5% in four years – matching North Carolina’s rate. The rate for businesses making less than $100,000 would be reduced from 7% to 2.5% in just two years.

“New Jersey used to be a hub for innovation and the medicine chest of the world,” DePhillips said. “But if Democrats extend the surtax, we will only cement our bad-for-business reputation. I urge my colleagues and Speaker Craig Coughlin to join me in denouncing the Senate President’s plan and not only let the surtax sunset, but consider lowering it to attract more businesses and create more jobs.”