Sax’s Goldstein on why top companies are paying even more than they did with CBT surcharge

Some feel Gov. Phil Murphy’s proposed 2.5% Corporate Transit Fee is merely a replacement for the now-sunset Corporate Business Tax surcharge.

For the business community, it might be worse.

So said Richard Goldstein, a partner and state and local tax leader at Parsippany-based Sax LLP, who called it less than ideal.

“It is even less business-friendly than the CBT surcharge,” he said. “While the 2.5% transit fee surcharge is the same rate as the expired surtax, it applies to the first dollar for businesses with New Jersey allocated net income of more than $10 million.

“At least the expired surtax excluded the first $1 million of income from tax.”

At least, for the companies that are paying.

The CTF will only be asked of companies with $10 million in profits or more — approximately 600, the state estimates. More than 3,000 companies were on the hook for the CBT surcharge.

Murphy, in a not-so-subtle shot at New York City’s congestion tax, boasted that New Jersey doesn’t rely on its neighbors to solve its transit problem.

“We are solving our challenges on our own,” Murphy said.

The business community, of course, likely would have preferred the other option.

Goldstein suggests New York Gov. Kathy Hochel may have preferred another option, too. After all, congestion pricing also impacts New Yorkers.

“Many disgruntled drivers who will pay the New York City congestion pricing fee to enter Midtown Manhattan starting this spring would be happier if the cost fell on someone else, including corporations,” he said. “I wonder if New York’s governor is thinking, ‘I should have pushed a corporate surcharge instead.’”