As seen in COMMERCE Magazine
"One challenge we all face is the high cost of doing business, which hurts New Jersey’s competitiveness. New companies need to be nurtured and supported, and that means our state government has to re-think bankrolling its agenda on the backs of businesses. It means enacting business-friendly policies, lowering business taxes and curtailing excessive environmental regulations so the companies that are already here don’t leave for lower-cost states."
By Alex Serrano
New Jersey's new tax policies are creating new challenges for retaining and attracting businesses and making it necessary for accountants and other professional advisors to be evermore creative in advising their clients. New Jersey's Office Managing Partner, Alex Serrano, shares the following in the July 2018 issue of COMMERCE magazine:
New Jersey businesses that for tax purposes report their income through a flow-through entity (S-corporation, partnership LLC, or partnership) are in a tough position, since their income is taxed on owners’ personal tax returns. New Jersey’s personal income tax rates are higher than those of neighboring states, maximizing at 8.97% when taxable income exceeds $500,000. Pennsylvania pays a flat rate (3.07%) and New York State’s top rate of 8.82% doesn’t kick in until single taxpayers’ taxable income exceeds $1 Million ($2 Million for joint filers), thus most New Yorkers pay at a much lower tax rate.
Another obstacle is depreciation rules on capital assets – since NJ has decoupled from federal law, new federal depreciation rules don’t benefit New Jersey, and depreciation deductions at the state level may be significantly lower. Overall, in order to incentivize businesses, State legislators need to reconsider current tax policies. Citrin Cooperman’s focus has always been helping clients navigate the laws in place, and we continue helping business owners maximize their tax benefits, within an existing framework.
To view the full article, go to: COMMERCE Magazine