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The New Jersey Business & Industry Association is out with its 2024 Regional Business Climate Analysis, which finds New Jersey remains last in the region – by a wide margin – in terms of business taxes and cost competitiveness.

Prepared by NJBIA Director of Economic Policy Research Kyle Sullender, the study scores New Jersey and six surrounding states from one (least competitive) to seven (most competitive) on the below six individual cost drivers.

New Jersey by the numbers

• Minimum wage rate – $15.13
• Top income tax rate – 10.75%
• Top corporate tax rate – 9%
• State sales tax plus average local rate – 6.61%
• Property tax paid as a percentage of personal income – 4.76%
• Maximum UI contribution – $2,630.4

New York, Pennsylvania, Connecticut, Massachusetts, Maryland and Delaware were also evaluated.

Scorecard

With those figures, New Jersey has the highest corporate business tax rate and property tax paid as a percentage of personal income in the region. It also has the second-highest rate in the remaining four categories.

The NJBIA notes that the state’s corporate tax rate of 9% does not reflect the “about face” made by Gov. Phil Murphy on the 2.5% CBT surcharge sunset. After letting it expire at the end of the 2023, Murphy’s latest budget proposal includes a new, permanent 2.5% Corporate Transit Fee. NJBIA says the CTF would return the state’s top earning companies to “extreme national outlier” status for corporate taxes, at 11.5%.

With an overall business climate score of 10 points, New Jersey ranked lowest in the region for the sixth consecutive year.

The top six, from best to worst, were:

1. Delaware – 34 points
2. Maryland – 34 points
3. Pennsylvania – 30 points
4. Massachusetts – 24 points
5. Connecticut – 21 points
6. New York – 19 points

“Over the past year, our policymakers publicly acknowledged that New Jersey is an expensive state to do business and affordability and regional competitiveness,” said NJBIA President and CEO Michele Siekerka. “Sadly, their actions ignore their words and being a national outlier appears irrelevant to them when it comes to competitiveness.”

Promises, promises

Siekerka stressed that what policymakers miss is the fact that businesses rely on their word and actions when considering making investments.

“While the tax hike alone is bad enough, the way we are getting there, through broken promises and lack of notice, sends a clear message that our job creators don’t matter,” said Siekerka. “Beyond the numbers showing New Jersey as an outlier of cost-drivers for business, we appear to have a mindset that it’s OK to make it worse. It’s a sad time for New Jersey’s business community when the negative attitude toward our top employers falls in line with our negative numbers. We must do better for business.”

“With the proposal of a new and permanent 2.5% corporate income surtax, it appears New Jersey will remain a regional and national outlier for business cost drivers,” said Sullender.

He noted that New Jersey businesses are in a tax rut, adding: “And it doesn’t appear there are any mechanisms to drive them out.”

The full analysis is available here.

The latest on the Corporate Transit Fee and proposed budget:

• March 12: NJ budget bad for business, statewide groups testify
• March 7: NJBIA wants state to ‘Do Better for Business’ this budget season
• March 4: New CTF business tax to fund NJ Transit draws fire
• Feb. 28: New Jersey reacts to Murphy’s $55.9B budget
• Feb. 27: Murphy unveils $55.9B budget, calls for Corporate Transit Fee