The New Jersey Assembly recently passed legislation that would ease the burden of tax increases on small businesses after a surge in unemployment claims during the pandemic depleted the state’s Unemployment Insurance Trust Fund.
Now business leaders are taking aim at getting the bill passed in the state Senate.
Businesses are confronting about $ 250 million in added taxes this fiscal year and an additional $ 600 million or more over the next two years, according to the New Jersey Business and Industry Association.
TheAssembly voted without ay no votes to approve the bill bill A-3683. The measure would provide corporate business tax and gross income tax credits to small employers based on expected increases in their unemployment insurance contributions.
“We’re putting money back into the pockets of small business owners allowing them to grow their operations and invest in their employees,” Assembly Majority Leader Lou Greenwald, D-Camden a sponsor, said in a statement. Of the economy. Their success is our success. This legislation will help relieve a potential burden that can hurt many small employers. ”
The state Senate in early March advanced similar legislation that aims to replenish New Jersey’s unemployment fund with federal COVID relief money. That measure was referred to the Senate Budget and Appropriations Committee on March 7 and still awaits a hearing.
A bill identical to the one passed by the Assembly was referred to the state Senate Labor Committee on March 24, but lawmakers have yet to take any action on the measure.
“With only a few weeks remaining in the budget season and summer right upon us, assistance for small business is critically needed right now,” NJBIA Chief Government Affairs Officer Chrissy Buteas said in a statement. bills, which have the strong support of the Assembly, in a timely fashion. ”
Republican lawmakers have called on Gov. Phil Murphy to replenish the unemployment fund with a portion of the $ 6.2 billion in coronavirus aid the state received through President Joe Biden’s American Rescue Plan enacted in March 2021.
Shortly after Biden signed the measure, New Jersey Republicans unveiled a proposal for spending the money that included using $ 2.5 billion to stabilize the unemployment insurance fund and avoid employer tax increases.
State Sen. Declan O’Scanlon, R-Monmouth, called the Democrats’ tax relief legislation an “overly complicated scheme that doesn’t actually stop unemployment tax increases on New Jersey’s small businesses.”
“In contrast, Senate Republicans have proposed directly replenishing the Unemployment Insurance Fund with a portion of the billions of federal pandemic relief funds the state received to prevent further harm to employers who are already struggling,” O’Scanlon said. done exactly what we propose and have successfully avoided unnecessary payroll tax increases. ”
Assemblyman Roy Freiman, D-Somerset, a sponsor, said the tax credits included in the Assembly bill “will help over 70% of New Jersey businesses pay for scheduled unemployment insurance tax increases.”
“With tax credits, we can offset the impact of any increases in unemployment insurance tax small businesses will see in the next few years,” Freiman said in a statement.
The New Jersey Chamber of Commerce and the NJBIA have both issued multiple statements in support of the legislation, which also includes a measure requiring New Jersey to pay off its federal unemployment insurance loan with money from the state’s general fund.
New Jersey Chamber of Commerce President and CEO Tom Bracken said replenishing the unemployment trust fund without increasing taxes “is a good move that we have pushed for since our business summit last month.”
“New Jersey’s business community was ravaged by the COVID-19 lockdown, and most businesses are still dealing with the fallout,” Bracken said. “We believe state leaders need to again look at every way possible to help businesses.”
The federal loan New Jersey used to maintain unemployment benefits must be repaid by November to avoid triggering a $ 75 million federal tax increase on top of the state’s scheduled UI increases, the NJBIA said.
“In addition to providing businesses much-needed tax relief, paying off that federal loan will prevent New Jersey from wasting taxpayer dollars on unnecessary interest,” Emigholz said. “That’s the responsible thing to do for New Jersey.”
The state Assembly voted 74-4 to pass a separate small business relief bill, A-4222, that would help shore businesses during the busy summer season by expanding working hours for minors. That measure also still awaits a committee hearing in the Senate. Bills must be passed by both chambers of the state Legislature and then signed by Murphy before they become law.
“Time is of the essence for all of these bills that are important to business,” Buteas said. “Businesses cannot afford for these bills to get passed over before the Legislature’s summer break. We respectfully ask the Senate to get these bills to the Governor’s. desk and for Governor Murphy to sign them. ”
To be eligible for the tax credits if the legislation does cross the finish line, employers would have to meet the US Small Business Administration’s definition of a small business, which can vary by industry. Generally, companies with fewer than 1,500 employees or less than $ 40 million in yearly revenue would qualify.
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Derek Hall may be reached at firstname.lastname@example.org. Follow him on Twitter @dereknhall..