Assembly clears a 10-bill package sponsors say would offer relief to residents and businesses alike
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A package of COVID-19 recovery bills aimed at helping New Jersey’s residents and businesses rebound from the ongoing health crisis won final approval in the state Assembly on Thursday.
Among the bills passed with widespread, bipartisan support was a measure that would establish a local property-tax rebate program to encourage residents to shop in their communities.
Other bills in the recovery package would address issues related to the stockpiling of masks and other personal protective equipment, the accessibility of broadband internet, and offering tax relief to businesses that fund New Jersey’s overburdened unemployment system.
Another piece of legislation urges the federal government to join the recovery effort by lifting the cap on the federal deduction for state and local taxes, known as SALT, from $10,000 to $25,000.
In all, 10 separate recovery bills were moved out of the lower house during an afternoon voting session. They were drafted earlier this year to address issues that were raised by a special economic advisory council that Assembly Speaker Craig Coughlin (D-Middlesex) convened in response to the coronavirus pandemic.
New Jersey has been hit hard by the health crisis, with more than 230,000 COVID-19 infections reported by the state so far this year, causing more than 16,000 deaths.
The pandemic has also triggered an economic downturn after many New Jersey businesses were forced to close their doors to help slow the spread of the disease. Despite recent signs of economic improvement, many restrictions on business activity remain in place, and unemployment has yet to return to pre-pandemic levels in New Jersey.
Building on initial aid earlier this year
Earlier this year, lawmakers passed an initial package of COVID-19 relief bills that provided immediate help to residents and business by, among other efforts, extending tax payment deadlines, establishing a statewide eviction moratorium and creating a grant program for small businesses.
The new package of recovery bills builds on those earlier efforts, which include encouraging residents to shop at small businesses in their own communities through the creation of a “rewards program” that would offer modest local property-tax rebates to those who participate.
“Small businesses provide jobs, lend their support to community organizations and causes, and create a robust economy,” said Assemblyman Ron Dancer (R-Ocean), a primary sponsor of the rewards-program bill.
“It’s commonsense solutions like this that will boost New Jersey’s economic recovery from the COVID-19 pandemic-induced recession and ease its burden on small businesses and hardworking families,” said Assemblyman Nicholas Chiaravalloti (D-Hudson), another primary sponsor of the bill.
Businesses could see lower taxes
Businesses large and small could also benefit from several other bills that are included in the recovery package, including one that would ease a tax hike many are facing as early as next year due to how the state generates funds through payroll taxes to support the New Jersey unemployment insurance trust fund. New Jersey has had to borrow money from the federal government in recent months to keep unemployment benefits funded during the recent pandemic-related surge in joblessness.
“Anything we can do to reduce rising tax obligations resulting from COVID-19 is a step we need to take,” said Assemblyman Vince Mazzeo (D-Atlantic), a primary sponsor of the bill.
Businesses would also get some regulatory relief through technical revisions in the state’s corporate-business tax under another piece of legislation that calls for simplifying some reporting requirements to improve overall compliance. Another measure calls for the establishment of a “Government Efficiency and Regulatory Review Commission.”
New York employers
Meanwhile, the Senate advanced during its own voting session on Thursday a measure that calls for the Department of Treasury to review and report on the way the state treats income earned by thousands of New Jersey residents who are employed by companies based in New York.
For months, those residents have been working from home in New Jersey due to the pandemic. But so far, Gov. Phil Murphy’s administration has instructed them to defer to their employers’ handling of their income taxes, and many employers have continued to withhold income taxes for New York instead of New Jersey.
New Jersey lawmakers believe many residents, as they continue to work from home during the ongoing health crisis, would see a tax break if their income becomes subject to New Jersey’s tax rates instead of New York’s.
“The report that the Treasurer will be required to produce under this legislation will show the scope of the problem and set the stage for future action,” said Sen. Steve Oroho (R-Sussex), a primary sponsor of the bill.
New Jersey residents could also see some tax relief if the federal government responds to a measure the Assembly passed on Thursday, calling for the federal SALT cap to be increased to $25,000.
Until a few years ago, there was an unlimited federal tax deduction for things like local property taxes and state income taxes. But among a series of major tax-policy changes enacted in 2017 by President Donald Trump and the then-Republican Congress, the $10,000 cap on the SALT deduction was established.
While many New Jersey residents have benefited from reduced individual income-tax rates and a widening of the standard deduction thanks to the 2017 tax revisions, others have been hit hard by other changes that were made to exemptions and deductions, including the capping of the previously unlimited SALT write-off.
“Given the enormous fiscal benefits that the SALT deduction provides to New Jersey residents and the State, and given the disparity in the amount that New Jersey residents pay in federal taxes in comparison to the amount that they receive in federal funding, the federal government should raise the SALT deduction to $25,000,” according to the legislation.
To read the article in the original format, click: From rebates to PPE to broadband access, lawmakers offer COVID-19 help