The New Jersey Business & Industry Association today urged members of the Senate State Government, Wagering, Tourism and Historic Preservation Committee to vote against legislation that would prohibit awarding state contracts and development subsidies to inverted domestic corporations.
In testimony prepared for today’s hearing, NJBIA Director of Taxation and Economic Development Andrew Musick said that this bill may wind up costing New Jersey well-paying jobs and could also make it harder to attract companies to the state by reinforcing New Jersey’s reputation as anti-business.
“Corporate inversions take place because of the federal tax code and have nothing to do with state programs or state contracts,” Musick said. “In fact, they have little to no impact on New Jersey’s Corporate Business Tax collections or the jobs and facilities located in the state.”
Musick urged the committee to consider the tax environment in the United States. American companies face a corporate tax rate of 39 percent when combined with marginal federal and state rates. Of the 34 democracies that make up the Organization for Economic Cooperation and Development, the U.S. ranks 32nd in tax competitiveness.
“New Jersey competes in global economy, and it is important that the state develops policies that encourage companies to operate here, not policies that create additional challenges,” Musick said.