Requires State Treasurer to issue report concerning New York's taxation of New Jersey residents' income.
The bill emphasizes the need for New Jersey to protect the financial interests of its residents facing taxation by New York. It outlines that current practices allow New York to retain income tax revenue, contributing to financial inequities for New Jersey residents. The report will analyze New Jersey's initiatives to address these taxes, including any education efforts directed toward New Jersey residents and their employers regarding the legality of New York's income tax collection from them. A significant component of the report will include estimations of potential tax savings for New Jersey residents if they could shift these tax obligations from New York to New Jersey.
Assembly Bill A2707 mandates that the State Treasurer of New Jersey compile and submit a report to the Legislature regarding the taxation of New Jersey residents by the State of New York. The bill stems from concerns about thousands of New Jersey residents who, due to their employment in New York, have New York income taxes deducted from their paychecks, despite often working from home in New Jersey. The proponents highlight the growing inequity caused by technological improvements and the impact of the COVID-19 pandemic, which has shifted many workers to remote setups.
Among the key points included in the report, the bill calls for an examination of previous tax credits claimed by New Jersey residents for taxes paid to New York, as well as discussions on what steps can be taken to ensure fair taxation. Additionally, it highlights the need to address any obstacles posed by existing state or federal laws that may hinder equitable treatment of cross-border commuters. The exploration of litigation strategies, drawing from cases concerning similar issues in other states, particularly between New Hampshire and Massachusetts, underscores the urgency of resolving these taxation conflicts.
The swift enactment of this bill is critical to address immediate taxation concerns exacerbated by the pandemic, indicating a shift in how work is structured geographically. The report's findings are expected to provide legislative insight that could lead to broader discussions on taxation policies affecting residents who commute across state lines, aiming to safeguard New Jersey's public finances while ensuring fair treatment of its workforce.