New Jersey Further Weakens Business Tax Climate
July 10, 2006
New Jersey scored second worst (49th) on the Tax Foundation’s 2006 State Business Tax Climate Index (SBTCI), but the state is now taking dead-aim on New York to take over the dubious position of having the worst business tax climate in the country.
Lawmakers in the Garden State finally reached an agreement last week to end the state’s budget stalemate and end the partial shut down of the state government. While it may be viewed as a victory for lawmakers eager to restart government services, the bill is undoubtedly a loss for New Jersey businesses and taxpayers.
As part of the bill New Jersey’s sales tax rate will increase to 7 percent from 6 percent. Additionally, a corporate income tax surcharge of 3.5 percent will be implemented and other tax increases are included in the bill as well. The sales tax base was expanded to include many services, which is one positive development from an otherwise disastrous bill for the people of New Jersey.
New Jersey benefits economically from its proximity to New York City, but unless lawmakers dedicate themselves to fixing the business tax climate in the state, even the bright lights of the big city will not be able to save New Jersey’s economy from its ruinous business tax climate.