New research from the Tax Foundation indicates that New Jersey has the highest top statutory corporate tax rate in the country.
One of 44 states that levy corporate income taxes is the Garden State, which the Washington, D.C.-based charity estimates contributed 7.07% to state tax collection and 4.04% to general state revenue in the fiscal year 2021.
According to the research, the top marginal corporate tax rate for the upcoming tax year is 11.5% in New Jersey, followed by Minnesota at 9.8% and Illinois at 9.50%.
The lowest flat rate in the nation is in North Carolina, where it is 2.5%, followed by rates in Missouri and Oklahoma, which are both at 4%, according to the research.
The fiscal year 2021’s corporation tax percentage across the country is “much up” compared to prior fiscal years.
“Corporate income taxes represented 2.26% of total revenues in FY 2020, which is more consistent with historical averages, “They wrote the study.
According to the foundation, economists see corporate income taxes as double taxation that disproportionately affects consumers, shareholders, and workers.
The foundation stated, “The same money is taxed once as profit and once as individual income when dispersed as dividends to shareholders.”
Gov. Phil Murphy has stated that citizens should expect “substantial tax reduction,” even after the state passed a $2 billion property tax refund scheme last year. This could be good news for New Jerseyans despite the state’s high tax load.
The state’s corporate company tax levy of 2.5 percent will also expire, according to the Democratic governor. Since 2018, there has been a fee; it will end in December. The corporate tax rate in New Jersey will decrease to 9% in 2024 if that takes place.
Business leaders in the state have long argued that taxes need to be reduced to stop companies and employees from moving to jurisdictions with cheaper rates.
Data from the U.S. Census Bureau show that between July 2021 and July 2022, New Jersey lost an estimated 6,000 inhabitants.
The Tax Foundation’s research, according to lobbyist Christopher Emigholz for the New Jersey Business and Industry Association, shows that the state continues to be a “negative outlier in costs and affordability” because it has the nation’s highest corporate tax rate by a wide margin and is the only one in double digits.”
The state “won’t be the worst,” he claimed, because of the promises to let the business tax surcharge expire.
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