A bipartisan group of New Jersey senators is drafting legislation to counter some of the negative consequences of federal tax code changes.
Sen. Tony Bucco, R-Morris County, said the measure would allow small businesses registered as S corporations, LLC’s, and other partnerships to pay their state taxes as a corporate entity, so their owners and partners could deduct the full amount of the tax on their federal returns.
“We have seen over the years the demise and the moving of businesses out of our state because of taxes and regulations and whatnot. And we are trying to make sure that our businesses stay here so that we have jobs for our citizens,” said Bucco.
Sen. Paul Sarlo, D-Bergen County, said the legislation would amend the state tax code to a system that was in place prior to 1993. “Essentially we’re going back to the future with a solution that is IRS proof. I am not sure how the IRS could even think about challenging our decision to return to a tax system that was in place for decades,” he said.
Sen. Troy Singleton, D-Burlington County, said the legislation would help more than 260,000 individuals and families who report S corporation or partnership income.
The New Jersey Society of CPAs said the measure could save business owners hundreds of millions of dollars without costing the state anything.