Tax Alert: Numerous Tax Hikes Included in New Jersey Budget Agreement
7/02/2009
On June 29, Governor Jon Corzine signed the New Jersey fiscal year 2010 state budget agreement into law. The adopted budget reflects spending decreases of $1.3 billion and tax increases of $1.7 billion. The major tax increases are as follows.
- A temporary one-year increase in the gross (personal) income tax rates retroactive to January 1, 2009 – 8 percent on incomes of $400,000 - $500,000 (currently 6.37 percent), 10.25% on incomes of $500,000 - $1,000,000 (currently 8.97 percent) and 10.75 percent on incomes over $1,000,000 (currently 8.97 percent).
- A one-year reduction in the $10,000 gross income tax deduction for real estate taxes paid on a principal residence to $5,000 for taxpayers under age 65 with incomes between $150,000 and $250,000.
- An extension of the 4 percent corporation business tax (CBT) surcharge for an additional year through tax periods ending June 30, 2010. This raises the 9 percent top rate to 9.36 percent.
- An estimated 20 percent increase in employer unemployment insurance taxes effective July 1, 2009 equating to approximately $90 per employee.
- An increase in the cigarette tax from $2.575 to $2.70 per pack effective immediately.
- A 25 percent increase in the tax on hard alcohol from $4.40 to $5.50 per gallon and a 25 percent increase in the tax on wine from 70 cents to 87.5 cents per gallon, both effective on August 1.
Please contact Neil Becourtney, Partner or your J.H. Cohn professional at 877-704-3500 with any questions.
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