Is it easy to do business in New Jersey? According to a recent report by the Tax Foundation, a research group that analyzes tax policies across the nation, the state has room for improvement.
Is it easy to do business in New Jersey? According to a recent report by the Tax Foundation, a research group that analyzes tax policies across the nation, the state has room for improvement.
The organization released its “2017 State Business Tax Climate Index,” which sought to determine how well each state structured its tax systems, comparing them with each other to identify states with the best and worst business environments.
How the Tax Foundation conducted its analysis
Instead of judging each state based on how much individuals, small businesses and corporations had to pay in taxes, the Tax Foundation analyzed the simplicity of each tax system, and whether those systems encouraged businesses to either leave or remain in one state or another.
The Foundation maintained that a state could have all major taxes (the corporate income tax, the individual income tax and the sales tax) but still offer an economic climate in which businesses could prosper. For instance, although Utah imposes all three taxes on its residents and businesses, the organization ranked the state as the 9th best state in the country.
Where New Jersey stood
Across the board, New Jersey ranked on the lower end of the nation. With respect to corporate taxes, New Jersey rang in at 42. The report also noted the state had the worst property tax rate in the U.S. Overall, the state’s tax code is quite complex, which may discourage current businesses from relocating to New Jersey in the near future.
While the Foundation ranked New Jersey as having the worst tax system in the nation, the organization conducted the report before the state made a serious change to its tax code by eliminating the estate tax. Lexology noted that Governor Chris Christie signed legislation that will repeal the estate tax for those who either die on or after January 1, 2018.
In addition, the new law will increase the estate tax exclusion amount from $675,000 to $2,000,000 for decedents who pass away on or after Jan. 1, 2017 but before January 1, 2018.
Do you have any questions? Would you like to discuss the matter further? If so, please contact me, Amy M. Van Fossen, at 201-806-3364.
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