Governor Chris Christie signed legislation late Friday approving comprehensive tax reform and reauthorization of the Transportation Trust Fund.
“We applaud the Governor and the Legislature for working together in a bipartisan way to address New Jersey’s tax climate,” said NJBIA President and CEO Michele Siekerka. “We are very pleased that the Estate Tax will be eliminated by January 1, 2018 and that retirees will see a substantial increase in the income tax exclusion for retirement income. These provisions will make us more competitive with our neighboring states New York and Pennsylvania, which are the top two outmigration states.
“Today’s action represents long overdue tax reforms that are a necessary balance to the investment we are making in our transportation infrastructure,” Siekerka said.
Siekerka said the Estate Tax and retirement income exclusion are major drivers of outmigration for New Jersey businesses. NJBIA’s 2016 Business Outlook Survey indicated that two-thirds of members took the estate and inheritance taxes into account when making business decisions and a similar percentage would not make New Jersey their domicile in retirement.
Further, NJBIA’s 2016 outmigration report found that more than $18 billion in adjusted gross income left the state during the last decade. If just 20 percent of those ages 45 and over who left the state in 2013 had stayed, more than half a billion dollars in adjusted gross income would have stayed here with them, along with 2,279 jobs and $349 million in economic activity.
“There is still a long way to go, but today we can begin chipping away at the state’s onerous tax burdens that weigh on residents and businesses,” Siekerka said.