In a world where everything else seems to be changing, at least one thing is familiar: New Jersey is ranked by the Tax Foundation as having the nation’s worst business tax climate.

Jared Walczak, vice president of state projects for the Tax Foundation, said “New Jersey once again ranks dead last,” getting low marks in all five areas of taxes that are considered.

“This isn’t just saying that New Jersey has high taxes, although that’s certainly true. It’s saying that they’re poorly structured taxes,” Walczak said. “They’re taxes that reduce the overall competitiveness of the state, that are difficult to comply with, raise a lot of questions, a lot of compliance costs. It’s a poor overall structure.”

The report takes into consideration individual income, corporate, property, unemployment insurance, and sales and excise taxes.

“On four of those five categories, New Jersey is in the bottom 10,” Walczak said. “Only on unemployment insurance taxes is it a little more middle of the pack, but even then, worse than the national average.”

Walczak said the rankings have “a snapshot date” of July 1, meaning the increase in the gas tax that went into effect Oct. 1 isn’t considered.

The tax hikes approved last month as part of the new budget were also not considered, but those wouldn’t have changed the rankings, as the millionaires tax expanded the bracket but didn’t raise the marginal rate and the corporate tax surcharge was extended but not raised.

“So most of that is being included.,” Walczak said. “The gas tax increase is not because that’s very recent and past our snapshot date.”

It’s an annual report, and the story gets a little repetitive.

“As we revise and expand the report, we back-cast so that any methodological additions or changes are reflected in previous years’ scores,” Walczak said. “And we back-cast back to 2014, and New Jersey has been dead last for every year since 2014.”

In 2014, New Jersey ranked 49th.

Critics note the report focuses only on taxes and doesn’t account for other features that make a state attractive for businesses, such as well-regarded public schools, a highly educated workforce, availability of transit and transportation and proximity to the major markets of New York and Philadelphia.

Walczak said New Jersey has among the nation’s most complicated corporate business taxes, adding to the state’s low score in its ranking.

“It’s not just a matter of if it’s high – it’s a very high rate – but it’s very complex, too,” he said. “And compliance costs help no one. It costs more for the state to administer. It costs businesses without generating revenue. There are lots of way you can streamline the tax structure the state already has.”

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The Assembly Commerce & Economic Development Committee on Thursday took up a bill, A4809, addressing some of those issues. It would make technical corrections to the corporate business tax, making reporting and compliance easier.

"Anecdotally, NJBIA has heard that this bill would potentially reduce the CBT paperwork by thousands of pages,” said Christopher Emigholz, vice president of government affairs for the , New Jersey Business & Industry Association. “The bill also answers some outstanding questions regarding New Jersey’s combined reporting/unitary changes from 2018.”

Michael Symons is State House bureau chief for New Jersey 101.5. Contact him at

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