New Jersey Assembly Bill A259

New Jersey 2022-2023 Regular Session

• Introduced: 1/11/22
• Refer: 1/11/22

Caption

Provides corporation business tax credits and gross income tax credits to small business employers and farm employers for increases in certain mandatory employer contributions.

Impact

The bill particularly focuses on small businesses defined as employing fewer than 25 individuals and generating less than $1 million in annual receipts. It caps the annual credit at $12,000 per taxpayer, which means that eligible small businesses and farm employers could receive substantial tax relief from an otherwise burdensome cost structure. However, the credits only apply to contributions made during the privilege periods that commence on or after January 1, 2020, and before January 1, 2030, creating a time-bound aspect to this financial assistance.

Summary

Assembly Bill A259 aims to provide significant financial relief to small businesses and farm employers in New Jersey by offering corporation business tax (CBT) and gross income tax (GIT) credits. This initiative introduces tax credits based on increases in mandatory employer contributions for things such as workers' compensation insurance, New Jersey Temporary Disability Insurance, and Unemployment Insurance. The credits are designed to compensate small entities for costs incurred due to mandatory contributions, effectively creating a safety net for these employers during economic fluctuations.

Contention

The bill represents a balance between government intervention in supporting local economies and ensuring that businesses can manage their mandated costs more effectively. While many stakeholders laud the financial support it provides, there may be concerns regarding its long-term sustainability and the implication of such credits on broader taxation policies within the state, particularly if such measures are seen as preferential treatment for small businesses over larger corporations. As the economic landscape evolves, the effectiveness of the tax credits in truly aiding small employers will be closely monitored.