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Legislative Updates

CCSNJ Testifies to Protect PA/NJ Reciprocity Agreement

Legislative Updates

On May 18, Chamber of Commerce Southern New Jersey (CCSNJ) Manager of Government Affairs, Hilary Chebra, provided testimony before the Assembly Commerce and Economic Development Committee and the Assembly Appropriations Committee on A-4694 (Tully/Swain). 

This bill, A-4694 (Tully/Swain), would create a "convenience of the employer" test for residents of states that impose a similar test. It would also require the New Jersey Economic Development Authority (NJEDA) to create an employer tax credit program awarding up to $25 million in grants for out of state businesses to assign their New Jersey resident employees to New Jersey locations.

The CCSNJ successfully fought for and secured an amendment to ensure that the bill will have no effect on the New Jersey/Pennsylvania Income Tax Reciprocity Agreement. The reciprocity agreement, which was signed in 1976, allows that New Jersey collects income taxes from New Jerseyans who work in Pennsylvania and Pennsylvania collects taxes from people living in Pennsylvania and working in New Jersey. Neither state collects income taxes from residents of the other state whose employers are across the river from their home.

In her testimony, Ms. Chebra argued that this agreement is an important tool for South Jersey-based businesses that recruit talent from across the Delaware River. The reciprocity agreement assures that those employees can continue to pay Pennsylvania’s flat income tax rate of 3.07% as opposed to the much higher income tax levied in New Jersey.

The bill was favorably released from the Assembly Commerce and Economic Development Committee with the clarifying amendment by a unanimous vote. The amended bill was then unanimously released from the Assembly Appropriations Committee later that afternoon and now awaits a vote by the full Assembly.

To read the CCSNJ testimony on A-4694, click here.

To read press coverage on the testimony, click here.

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For any Government-related comments, questions or suggestions please contact:

Hilary Chebra

Manager, Government Affairs, CCSNJ

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