Provides corporation business tax credits and gross income tax credits to small business employers and farm employers related to increase in State minimum wage.
Impact
S604 establishes a tax credit based on the difference between the state-mandated minimum wage and the previous minimum wage before the phase-in began. Specifically, the credit is calculated for each employee and is capped at $12,500. This tax relief mechanism is designed to support smaller businesses that may struggle to meet new wage requirements, providing them with limited financial relief for up to ten years after enactment. The bill also stipulates that any excess tax credits beyond the employers' tax liabilities can be carried forward or refunded, enhancing their viability and competitiveness.
Summary
Senate Bill S604, introduced in the 221st Legislature of New Jersey, aims to provide corporation business tax (CBT) credits and gross income tax (GIT) credits to small business employers and farm employers in response to an increase in the state minimum wage. This initiative is particularly pertinent as New Jersey has been phasing in a minimum wage increase to $15.00 per hour, following legislation enacted in 2019. The bill defines 'small business employer' as those with fewer than 25 employees and less than $1 million in annual net receipts, while 'farm employer' pertains to those employing individuals to work on farms, either on a piece-rate or hourly basis.
Contention
Despite the potential benefits of the bill, it may be met with scrutiny regarding its long-term fiscal impact on state revenues, particularly concerning whether it may inadvertently discourage hiring or employment growth due to budget constraints. Similarly, there are concerns over the sustainability of such tax credits and whether they will provide the intended relief to the targeted employers without leading to unintended economic consequences. As with any legislation affecting labor costs, discussions around S604 are likely to highlight differing viewpoints on business viability versus fair wage regulations, making this a nuanced topic that could spark significant debate in legislative sessions.
Carry Over
Provides corporation business tax credits and gross income tax credits to small business employers and farm employers related to increase in State minimum wage.
Provides corporation business tax credits and gross income tax credits to small business employers and farm employers related to increase in State minimum wage.
Provides corporation business tax credits and gross income tax credits to small business employers and farm employers for increases in certain mandatory employer contributions.
Provides corporation business tax credits and gross income tax credits to small business employers and farm employers for increases in certain mandatory employer contributions.
Provides corporation business tax credits and gross income tax credits to small business employers and farm employers for increases in certain mandatory employer contributions.
Provides corporation business tax credits and gross income tax credits to small business employers and farm employers for increases in certain mandatory employer contributions.
Directs DOLWD to establish regional farm wage; provides corporation business tax credits and gross income tax credits to farm employers paying certain farm worker wages.
Provides corporation business tax credits and gross income tax credits to small business employers and farm employers related to increase in State minimum wage.