New Jersey Governor Phil Murphy and leaders of the legislature stated Monday that they are looking to strike a compromise on taxes and revenues. Murphy has not yet acquiesced, however. He explained to reporters Monday that the Legislature’s budget is still off-target by at least $855 million. The legislature passed a new business tax bill on Monday while Murphy continues to push a personal income millionaire’s tax.
According to McCarter & English Partner Michael Guariglia, the difference between the taxes is that the state can rely on the personal income tax with more certainty than it can the business tax. That’s because, Michael explains, companies can shift around the income to make it appear is if the allocated income is in another state, or defer income until the business tax expires – both of which would result in significant loss of revenue for the state.
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