New Jersey Assembly Bill A2899

New Jersey 2022-2023 Regular Session

• Introduced: 2/28/22
• Refer: 2/28/22

Caption

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

Impact

This legislation targets one of the smallest segments of business taxation—specifically S corporations—by easing the minimum tax burden. The anticipated effect is to support economic growth by allowing these corporations to allocate funds that would have gone to taxes towards investment in their business. This could lead to job creation and enhanced economic activity at the local level as these small businesses are often significant components of the economy.

Summary

Assembly Bill 2899 aims to eliminate the $375 minimum Corporation Business Tax (CBT) for New Jersey S corporations with gross receipts below $100,000. Currently, even if such corporations earn significantly less, they are still required to pay this minimum tax, which can be a financial burden. The bill proposes to amend the existing tax structure, allowing small businesses greater flexibility and encouraging reinvestment in their operations during a time when the state is recovering from economic hardships.

Contention

While the bill presents benefits for small businesses, there may be concerns from other stakeholders about the implications of reducing tax revenues that fund state services. Critics could argue that lowering tax burdens on S corporations may exacerbate funding shortfalls for public projects and initiatives. Discussions around this bill may need to address balancing the interests of small business economic support with the state's fiscal requirements.