Under Legislation, CBT Continues to Encourage Corporate Businesses to Contribute Fair Share
Legislation, sponsored by Assemblywoman Shavonda Sumter (D-Bergen, Passaic), aiming to provide critical funding for programs that help the state’s most vulnerable residents cleared the Assembly *Budget Committee on Tuesday.
The legislation (A-4721) is one of several measures released by the panel as part of the Fiscal Year 2021 budget plan.
Assemblywoman Sumter issued the following statement on the measure upon committee approval:
“The corporate business tax is an integral part of supporting the priorities for those in need during this most unprecedented time in history. Through this funding, the state can continue to provide relief to our most vulnerable residents and the programs they rely on such as the Senior Freeze property tax reimbursement program and the Homestead Benefit Program.
“Businesses continuing to contribute their fair share will support critical investments in our communities and our residents during a fiscal year unlike any we have seen before.”
The bill would apply the existing corporation business tax (CBT) surtax at a rate of 2.5 percent until December 31, 2023, phasing out in four years. However, if the federal corporate income tax rate imposed pursuant to section 11 of the federal Internal Revenue Code of 1986 is increased to a rate of at least 35% of taxable income, the imposition of the surtax would be suspended following the conclusion of the taxpayer’s privilege period corresponding with the increase to the federal corporate income tax rate. It would also require the Director of the Division of Taxation in the Department of the Treasury to waive all penalties that a taxpayer may incur because of the retroactive imposition of the surtax rate.
The bill would take effect immediately and would apply to privilege periods beginning on or after January 1, 2020.