New Jersey’s business community is counting on the legislature and Governor Murphy to keep their word when it comes to corporate taxes.

To resolve contentious budget negotiations in 2018, Governor Murphy, Speaker Coughlin and then-Senate President Sweeney agreed to a temporary, four-year increase in the state’s Corporate Business Tax (CBT), imposing a surcharge on all companies earning more than $1 million per year. The surcharge increased the 9 percent rate by 2.5 percent in the first two years, with the intent of being phased out over 2 years, by 2021. At 11.5 percent, New Jersey’s CBT ranked as the highest in the nation, with no other state in double-digits. Citing fiscal uncertainty when the COVID-19 pandemic struck in 2020, the Governor and legislative leaders shelved the original plan to sunset the temporary surcharge at the end of 2020 and instead extended the surcharge to the 2024 Fiscal Year, which begins July 1.

It is no secret the last few years have been extremely difficult for business owners in New Jersey. Beyond the COVID-era restrictions and tax increases to replenish the Unemployment Trust Fund, ask any Garden State business owner and they can tick off a litany of new regulations enacted in recent years to make operating in our state more difficult. In his February Budget Address, Governor Murphy called for the temporary CBT surcharge to be allowed to sunset as scheduled. He said the state should “keep our word” so that business owners can “create jobs, to invest in new and more efficient equipment, to lower costs to consumers, and to be able to stay here.” In a tacit admission that high taxes do matter, the Governor added that sunsetting the temporary surcharge will help the state “compete for the world’s leading companies and make New Jersey the place where entrepreneurs will want to come to start new ones.”