New Jersey Governor, Phil Murphy, signed a $37.4 billion budget last night, avoiding a government shutdown. This year’s budget is 8% higher than last fiscal year’s budget.
The Fiscal Year 2019 budget highlights include:
- Millionaires Tax -The top tax bracket increased from 8.97% to 10.75% for those with income of $5 million and more. The increase in the top rate makes New Jersey the second highest in the nation.
- Corporate Business Tax (CBT) – Increases the Corporate Business Tax for the next four years. Companies that pay the tax will see a 2.5% increase for the next two years and a 1.5% increase for the following two years.
- Uber/Lyft Tax – A new tax on ride-sharing services. Depending on the type of service, the new tax will cost consumers between 25 and 50 cents per ride.
- Sales Tax – An increase back to a 7% sales tax was NOT included in the FY19 budget as the recent U.S. Supreme Court case South Dakota V. Wayfair, regarding the state’s ability to impose a sales tax for online shopping, will eventually generate additional revenue.
- Earned Income Tax Credit – An increase in the Earned Income Tax Credit will assist households with family incomes under $60,000.
- Property Tax Deduction Increase – In Gov. Murphy’s Budget Address he expressed support for an increase in the state’s property tax deduction from $10,000 to $15,000. That increase was approved by the Legislature and awaits the Governor’s approval.
- Tax Amnesty Program – As part of the budget negotiations, residents owing back taxes to the state will now have the opportunity to pay off their debt without any penalty or interest costs.
Categories: Tax Planning & Compliance