Excludes military compensation of military personnel serving outside of this State from gross income tax.
Impact
The implementation of S627 would significantly alter the tax liabilities of military personnel based in New Jersey but serving in other locations. By exempting their income from state gross income tax, the bill intends to ensure that service members are not taxed on income they earn while fulfilling their military duties outside of the state. This could lead to increased disposable income for servicemen and women, enabling them to better support themselves and their families during their service.
Summary
Senate Bill S627 aims to amend New Jersey's tax code by excluding military compensation for servicemen and women stationed outside the state from gross income tax. The bill specifically addresses compensation paid by the United States for services rendered by military personnel who are either not domiciled in New Jersey or are New Jersey residents serving outside of the state. This legislative change seeks to provide financial relief to active duty service members, recognizing the additional burdens they face while serving away from home.
Contention
While the bill presents potential benefits for military personnel, there may be some discussions surrounding the implications of such tax exemptions on state revenue. Critics may argue that this change could reduce tax income from a segment of the population that contributes significantly to community and state finances. Furthermore, concerns may be raised regarding the fairness of tax policies that favor certain groups over others, thus prompting debates regarding equity in the tax system.