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EAlert: NJ Tax Update

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.

For additional information, contact Jason Drucker, Tax Supervisor, at jdrucker@grassicpas.com, or Jeff Cohen, Tax Services Leader and Partner of Grassi & Co., at JCohen@grassicpas.com.
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