March 2, 2020
The New Jersey Business & Industry Association (NJBIA) conducted its
2020 Business Climate Analysis
. The report was released on Monday, February 24, 2020. NJBIA found that New Jersey has the least competitive business climate in the region for the third consecutive year. NJBIA examined six individual business cost drivers in seven states including New Jersey, Massachusetts, Connecticut, New York, Pennsylvania, Maryland, and Delaware. New Jersey ranked the lowest due to its corporate tax, state sales tax, income tax, and property taxes.
“The only way for New Jersey to turn this situation around is with comprehensive reforms that are long-term and sustainable, not more tax increases and short-term fixes that only get the state through the next one-year budget cycle or two-year election cycle,” said NJBIA President and Chief Executive Officer Michele Siekerka in a statement.
NJBIA’s annual Regional Business Climate Analysis was prepared by Nicole Sandelier, director of economic policy research for NJBIA. Six factors were analyzed: minimum wage, top income tax rate, top corporate tax rate, state sales tax rate, top unemployment tax rate, and property taxes as a percentage of income. Each state’s rates were compared and scored from one (least competitive) to seven (most competitive).
According to the report, New Jersey’s overall business climate score (16) was the weakest. Once again, Delaware (31), Maryland (30), and Pennsylvania (28) were ranked first, second and third. New York’s overall score (23) improved one point from 2019 to secure fourth place, while Connecticut (22) dropped one point this year to finish fifth behind New York. Massachusetts (20) ranked sixth both years.
Compared to the six other states examined in the study, New Jersey had the highest top income tax rate (10.75%), top corporate tax (10.5%), state sales tax (6.625%) and property taxes paid as a percentage of income (5.05%).
According to NJBIA’s analysis of audited state revenues, expenses and debt found in New Jersey Comprehensive Annual Financial Reports, state revenues increased just 23 percent from 2007 to 2017 while expenses have increased 45 percent and debt has increased 382 percent
Feel free to contact any member of our team with questions at 610-828-1900 (PA) or 732+-341-3893 (NJ). You can contact Rich Higgins, CPA, managing principal- New Jersey office, at
[email protected]
or me at
[email protected]
. We are always here to answer your questions.
Martin C. McCarthy, CPA, CCIFP
Managing Partner
McCarthy & Company, PC
Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).
