New Jersey 2022-2023 Regular Session

New Jersey Senate Bill S196

Introduced
1/11/22  

Caption

Eliminates minimum corporation business tax on New Jersey S corporations.

Impact

The proposed legislation is set to take effect for privilege periods beginning on January 1, 2010. By removing the minimum tax on S corporations, the bill represents a significant reform aimed at fostering a more favorable business environment in New Jersey. Supporters argue that eliminating this tax could stimulate business growth and investment in the state, providing S corporations with additional capital to reinvest into operations, hiring, and expansion.

Summary

Senate Bill 196 aims to eliminate the minimum corporation business tax that currently applies to New Jersey S corporations. Under existing law, S corporations face a tiered minimum tax based on their New Jersey gross receipts, which can range from $500 for businesses earning under $100,000 to $2,000 for those with gross receipts of $1,000,000 or more. By abolishing this tax, the bill intends to alleviate the financial burden on S corporation shareholders, who often face double taxation since S corporations pass income directly to their shareholders for tax purposes.

Contention

Opponents of SB 196 may express concerns regarding the fiscal implications of this tax relief on the state's budget, particularly in terms of revenue loss. The proposal to eliminate a predictable source of tax income could lead to debates about long-term sustainability of state funding for public services. Additionally, critics may argue that the bill disproportionately benefits larger businesses while doing little for small businesses that do not qualify as S corporations, potentially leaving some sectors without adequate support.

Companion Bills

No companion bills found.

Previously Filed As

NJ S524

Eliminates minimum corporation business tax on New Jersey S corporations.

NJ A2899

Eliminates $375 minimum Corporation Business Tax on New Jersey S corporations with New Jersey gross receipts of less than $100,000.

NJ A2666

Eliminates $375 minimum Corporation Business Tax on New Jersey S corporations with New Jersey gross receipts of less than $100,000.

NJ A2706

Eliminates requirement that taxpayer that qualifies as S corporation for federal tax purposes affirmatively elect New Jersey S corporation status for purposes of corporation business and gross income taxes.

NJ S3126

Provides temporary corporation business tax and gross income tax credits for insourcing business to New Jersey.

NJ S1357

Provides temporary corporation business tax and gross income tax credits for insourcing business to New Jersey.

NJ A515

Provides temporary corporation business tax and gross income tax credits for insourcing business to New Jersey.

NJ A153

Provides small businesses with gross income tax or corporation business tax deduction for wages paid to minimum wage employees.

NJ A4295

Adapts new federal partnership audit regime under gross income tax, ends COVID-related State tax extensions, and eliminates requirement to affirmatively elect New Jersey S Corporation status.

NJ S2876

Adapts new federal partnership audit regime under gross income tax, ends COVID-related State tax extensions, and eliminates requirement to affirmatively elect New Jersey S Corporation status.

Similar Bills

NJ A1337

Reduces CBT rate; retroactive to January 1, 2020.

NJ A1152

Reduces CBT rate; retroactive to January 1, 2020.

NJ S524

Eliminates minimum corporation business tax on New Jersey S corporations.

NJ A2666

Eliminates $375 minimum Corporation Business Tax on New Jersey S corporations with New Jersey gross receipts of less than $100,000.

NJ A2899

Eliminates $375 minimum Corporation Business Tax on New Jersey S corporations with New Jersey gross receipts of less than $100,000.

NJ A1146

Gradually reduces CBT rate.

NJ A1331

Gradually reduces CBT rate.

MS SB2211

Tax Payer Pay Raise Act; remove phase out of income & franchise tax & remove deduction of federal employment tax.