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Over the summer, Governor Murphy signed legislation into law that would allow Jersey City to impose and collect an employer payroll tax of up to 1 percent on employees’ wages.  This was done as a way to help offset the loss of state education funds, approximately $175 million over 7 years, experienced by Jersey City under reforms to the state’s school funding law.

On Wednesday, Nov. 7, the Jersey City Council introduced the 1 percent employer payroll tax ordinance by a vote of 7-0-1, and the ordinance was placed on second reading.  The next City Council meeting is scheduled for Tuesday, Nov. 20, and while the agenda has yet to be released, we understand that it is likely the ordinance will be scheduled for second reading and a vote at this meeting.  For a copy of the ordinance, please click here.

NJBIA spoke in opposition to the ordinance at the Nov. 7 City Council meeting, expressing our concern about the impact an employer payroll tax would have on our member companies in Jersey City.  The cumulative impact of this payroll tax proposal on the heels of the state’s recent enactment of a corporation business tax surcharge and new labor and energy mandates will have an adverse impact on our job-creators. These aggregate costs will directly impact employers of all sizes in Jersey City.

Many companies courted by Jersey City to move across the Hudson River from New York, have made significant capital investments, including adding thousands of new employees. This payroll tax will effectively chip away at the competitive advantage Jersey City has established, as a lower cost alternative to surrounding states and specifically, New York City.  In short, a payroll tax would make Jersey City less competitive.

In recent months, NJBIA has worked with the Partnership for Jersey City, a diverse coalition with representatives from business, unions and a number of trade associations all opposed to the employer payroll tax including the Hudson County Chamber of Commerce, New Jersey Chamber of Commerce, New Jersey Apartment Association and New Jersey Restaurant & Hospitality Association.  Additionally, NJBIA met with a number of members of the Jersey City Council to convey how an employer payroll tax would increase the cost of doing business on both small and large businesses, as well as entrepreneurs in Jersey City.

For a copy of our testimony from the Nov. 7 hearing, please click here.

Taxation & Economic Development News

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