All the NJ taxes going up now that there’s a budget deal
TRENTON — As legislators continue fine-tuning the budget agreement reached last night to avoid a government shutdown life after the budget deal is also becoming clearer.
The final agreement resulted in concessions on both sides, but the end result will mean higher taxes in a lot of areas sure to hit the wallets of people across the state. There were also taxes that were not raised that had caused initial concerns about a shutdown.
Taxes going up include:
- A "millionaire's tax" that will be hiked to 10.75 percent. The tax will start at a threshold of $5 million, rather than $1 million. Murphy said the tax hike will generate around $280 million in revenue.
- A corporate tax surcharge will also be imposed. The surcharge will be 2.5 percent this year and next, and then lowered to 1.5 percent for the next two years. It is believed this tax will generate $425 million in annual revenue.
- A higher tax on Airbnb-style homeshare rentals.
- A tax on e-cigarettes that is still being finalized. The assembly passed a bill recently that would impose a $0.10 per fluid millileter tax for the sale of liquid nicotine. The Office of Legislative Services estimates the tax could mean more than $4 million in revenue for the 2019 fiscal year and more than $6 million the next two years.
What taxes are not going up:
- The sales tax will not be raised from its current level of 6.625 percent. Gov. Murphy had wanted an increase to 7 percent.
- There will not be sales tax imposed on short-term home rentals on the Jersey Shore as had been proposed by legislators during last-minute negotiations.
- The new budget also does not include gun-related fee increases the governor had sought during the negotiation process.
"It's been one hell of a journey," said Senate President Steve Sweeney, D-Gloucester. "As the governor said, it's never been a disagreement over where we wanted to go, it was how to get there. And we got there in a place we all think is fair."