On June 27, Chamber of Commerce Southern New Jersey (CCSNJ) Manager of Government Affairs, Hilary  Chebra testified before the Assembly Budget Committee and Senate Budget and Appropriations Committee on the FY2025 state budget and the proposed Corporate Transit Fee.

The Corporate Transit Fee would impose a 2.5 percent tax on New Jersey businesses with a net income of $10 million and is meant to provide a revenue source for NJ Transit. The tax is retroactive to January 1, 2024, meaning the state will collect back taxes from these businesses for the past six months. The tax is set to sunset after five years, which is only slightly different than Governor Murphy’s proposal in his Budget Address that would have made this a permanent tax without a sunset clause.

In her testimony, Ms. Chebra expressed her disappointment that after allowing the 2.5 percent surcharge on the Corporate Business Tax to sunset in January, the Governor and Legislature went back on their promise to businesses reinstating the same taxation level mere months later. She noted that the Corporate Transit Fee is particularly objectionable to South Jersey, as the region has long been and remains a transit desert, with little to no access to public transit. As a result, policymakers are taxing South Jersey-based businesses for public services they desperately want and need but have limited access to.

Finally, Ms. Chebra emphasized that this will make the South Jersey region less competitive compared to our neighbors in Delaware and Pennsylvania, the latter of which has taken steps to lower their Corporate Business Tax rate. She went on to say that sadly, Salem County – one of the poorest counties in the state - has already seen two confirmations of companies leaving the state, one of which is moving across the river to Pennsylvania, and expressed concerns that this trend will continue should the Corporate Transit Fee be enacted.

A full vote on the FY2025 state budget is scheduled for Friday. The CCSNJ will continue to keep you apprised as the budget deadline approaches.

To view the CCSNJ's testimony in the Assembly Budget Committee click here. The CCSNJ remarks on the corporate transit fee starts at the 0:56:55 mark and the CCSNJ remarks on the FY2025 budget budget is at the 1:59:36 mark.