Imposes 2.5 percent corporate transit fee on taxpayers with allocated taxable net income in excess of $10 million under CBT.
Impact
The implementation of the Corporate Transit Fee is expected to significantly augment the revenue stream for the New Jersey Transit Corporation. Consequently, this revenue will support both operational costs and necessary matching funds to obtain federal support for infrastructure upgrades. As a result, local transit services may see improved funding, which could enhance public transportation efficacy across New Jersey. The fee is anticipated to benefit transportation infrastructure at a time when many states are reevaluating funding sources for public transit.
Summary
Senate Bill 3513 introduces a Corporate Transit Fee of 2.5% on corporation business tax (CBT) taxpayers with allocated taxable net income exceeding $10 million, applicable for privilege periods from January 1, 2024, to December 31, 2028. This fee is structured to be an additional tax over the regular CBT liability for qualifying businesses, designed to enhance funding for New Jersey Transit operations and state matching fund requirements for federal capital projects. Notably, the fee does not apply to S corporations and public utilities.
Contention
On the legislative front, the bill might encounter opposition from business groups concerned about additional taxation, especially during economic recovery phases. Critics may argue that the surcharge could burden larger businesses, especially those operating close to the income threshold. Whether the fiscal benefits to public infrastructure justify the additional tax burden on corporations will likely be a contentious discussion among stakeholders, including taxpayer advocacy groups. The exclusion of S corporations from this fee could also lead to debates about fairness and equity in taxation policies within the state.
Imposes 30 percent electric public utility windfall surtax on certain taxpayers with allocated taxable net income in excess of 20 percent above five-year average income under CBT.
Imposes 30 percent electric public utility windfall surtax on certain taxpayers with allocated taxable net income in excess of 20 percent above five-year average income under CBT.
Permits deduction of 20 percent for qualified business income for certain individuals as owners of pass-through entities under gross income tax and corporation business tax.
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.