Proposed legislation would close a loophole that allows large companies to dodge New Jersey’s corporate income tax.
Some companies are using accounting maneuvers to shift income generated in New Jersey to subsidiaries in other states to avoid paying the state’s corporate business tax, said Sen. Ray Lesniak.
Those firms are “not only depriving our budget of approximately $200 million a year, but also being very unfair to all taxpayers and other businesses to abide by all the rules and pay all their taxes,” he said.
Erick Cedano, who owns a photography services studio in Elizabeth, said small businesses pay their share and changing the law is a matter of fairness.
“It will equalize things for business owners, no matter what their company size is,” said Cedano during a Statehouse news conference Thursday. “It will ensure the communities where small businesses serve have the funding they need to prosper and that we can meet the challenges we all face.”
The proposed legislation would require all the profits of a multistate company to be added together. A state would then tax the income generated there. Twenty-five other states already have such a law.