TRENTON, N.J. – The state Attorney General’s office announced today that they filed a brief with the U.S. Supreme Court challenging New York’s tax guidance for employers to tax employees working at home in New Jersey as if they were “days worked in New York.” New Jersey provides a tax credit for income taxes paid to other states.
Assemblyman Hal Wirths, along with Sen. Steve Oroho who was the first to vocalize the issue, have been vocal during the pandemic about the need to recover the income for residents and revenue for the state.
“New Jersey’s residents and the state will be better off for recouping money unjustly taxed by New York State. If we get this money back, it should go straight to schools and property tax relief,” said Wirths (R-Sussex), the Republican budget officer. “This cause was pretty much dismissed by Democrats during the two budget processes this year, and this revenue could have been in our plans. But, better late than never.”
The state Dept. of Treasury estimates that New Jersey would have credited up to $1.2 billion to taxpayers working from home instead of commuting to New York. Income tax revenue is constitutionally dedicated to property tax relief, most of which goes toward school funding.
“Hopefully the Supreme Court rules in our favor,” said Wirths. “If so, Democrats should embrace fewer tax increases than otherwise in the coming years. A smaller budget deficit is important for every residents’ financial future, and economic growth in the state.”
The brief joins a case filed by New Hampshire in October against Massachusetts for the same reason, which also includes challenges by Connecticut, Hawaii and Iowa. Each state claims that taxing non-resident income violates the Dormant Commerce and Due Process Clauses of the U.S. Constitution.