A new law (formerly bill A-4721), sponsored by Assemblywoman Shavonda Sumter (D-Bergen, Passaic), aiming to provide critical funding for programs that help the state’s most vulnerable residents was signed into law by the Governor Tuesday afternoon.
Assemblywoman Sumter: “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 new law applies 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 law takes effect immediately and would apply to privilege periods beginning on or after January 1, 2020.