New Jersey Businesses Oppose Proposed Corporate Transit Tax
TRENTON, NJ — New Jersey Transit is having a money problem. Hailed as the future of New Jersey’s green energy foundation, the mass transit system is a financial mess.
Now, the state is asking small businesses to bail out NJ Transit.
Governor Phil Murphy’s recent proposal to introduce a corporate transit tax is facing strong opposition from the business community. Announced during his budget address in February, the tax targets over 500 of the state’s largest employers to fund NJ Transit, aiming to generate $1 billion annually. Business leaders argue that this move could hinder new investments and add to the already high costs of doing business in New Jersey, potentially making the state less competitive.
“If taxes are your issue, New Jersey’s not for you,” the Governor once told residents of the state.
Now, that message goes for businesses, too.
Critics of the proposal, representing major employers from both North and South Jersey, contend that using businesses as a funding source for NJ Transit is misguided. They believe that the tax would disproportionately affect daily car commuters and undermine the state’s job market by placing New Jersey at a competitive disadvantage against states like North Carolina, South Carolina, Georgia, and Florida, as well as neighboring New York and Pennsylvania.
With neighboring states reducing their corporate taxes—Pennsylvania plans to lower its rate to 4.99% by 2031 and New York maintains a rate of 7.99%—the proposed additional 2.5% transit tax would elevate New Jersey’s corporate tax rate to 11.5%, the highest in the nation. This is particularly concerning to business leaders as New Jersey already ranks fourth highest in corporate tax rates across the country.
The business community is urging state legislators to reject the tax, emphasizing the need to welcome new investments rather than deter them, especially during times of inflation and economic challenges.