NJ businesses bracing for tax hike coming in 2023
When the COVID pandemic began in March 2020, hundreds of thousands of New Jersey residents suddenly lost their jobs.
Over more than two years, many New Jersey businesses closed, a lot of economic activity came to a halt and the New Jersey Department of Labor paid out billions of dollars in unemployment insurance fund benefits.
With the unemployment fund severely drained, Chris Emigholz, the chief government affairs officer for the New Jersey Business and Industry Association, said Garden State businesses have been hit with a dramatic increase in their UI taxes, and another big tax hike is scheduled for July 1.
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He said the top business issue facing New Jersey right now is getting financial help, especially for smaller businesses, before this next tax increase takes effect.
He noted that a majority of states receiving American Rescue Plan and CARES funding have used a portion of that money to replenish their UI trust funds but “New Jersey has not, so now we’re left with a situation where New Jersey employers are on the hook for this billion dollar increase over three years.”
He said employers have already made two UI tax increase payments, between $100 and $200 per employee, and the third is scheduled to be collected next summer, which will be very difficult for many businesses to handle.
“It is not a tax on profits or a tax on wealth, or a tax on the guys that are doing better, succeeding in business, it’s a tax on the mere existence of a job.”
Emigholz said business owners and leaders across the state are hoping New Jersey leaders will come up with a plan to assist businesses in paying for this final tax increase, especially when the state already has an affordability issue.
Times are already tough
“This is a time when inflation is occurring, supply chain issues are occurring, there’s a workforce crisis when people are having trouble finding anybody to work, this is an easy low hanging fruit on the affordability list,” he said.
He pointed out the state Legislature, on a bipartisan basis has already voiced support, and voted for (in the Assembly) a compromise assistance plan for smaller businesses, but Gov. Phil Murphy asked the measure be tabled in the State Senate, indicating the issue would be addressed in the fall, but so far nothing has happened.
“Taxes are going up through no fault of employers, we would like to see the state provide some affordability relief, some UI tax relief,” said Emigholz, “every single business pays into the UI fund, we hope that we can find some sort of a tax credit, cost savings for businesses.”