(TRENTON) – Legislation sponsored by Assemblyman Albert Coutinho to reduce the minimum tax on S-Corporations by 25 percent was approved Wednesday by the Assembly.
“This bill boosts New Jersey’s ability to better compete with our neighboring states and attract small and startup businesses which will create jobs for New Jerseyans,” said Coutinho. “These are tough economic times for everyone. This bill will help ease the burden by stimulating economic development and creating jobs.”
An S-Corporation is a form of corporation that meets the IRS requirements to be taxed under Subchapter S of the Internal Revenue Code. This gives a corporation with 100 shareholders or less the benefit of incorporation while being taxed as a partnership. This means that any profits earned by the corporation are not taxed at the corporate level, but rather at the level of the shareholders
Every one of New Jersey’s neighboring states has lower S-corporation minimum taxes, while three states have no minimum tax whatsoever.
The bill now goes to the Senate for further consideration.