Small businesses in NJ might get temporary tax break
TRENTON – Small businesses in New Jersey would get a tax break from the state covering their lowest-wage workers, if a bill endorsed Thursday by the Senate Economic Growth Committee makes it into law by mid-January.
The proposed tax credit – S3759/A5735 – would apply for the 2020 and 2021 tax years. It would equal 10% of the wages paid to employees whose hourly pay is no more than 20% above the minimum wage, or $14.40 an hour for most workers. It would be capped at half a business’ tax bill.
The credit would be available to businesses with fewer than 100 employees that are in retail trade; health care and social assistance; arts, entertainment and recreation; accommodation and food services; or other services.
Christopher Emigholz, vice president of government affairs for the New Jersey Business & Industry Association, said the help is welcome because even before the events of the last 21 months, it wasn’t easy to operate any small business in New Jersey.
“And then you layer that on top the impacts of the COVID pandemic,” he said. “You layer on top of that the workforce crisis that we’re going through and small businesses can’t afford to find anybody. Layer on top of that many of these small businesses … are impacted by the minimum wage increase.”
New Jersey’s minimum wage for most employees will increase from $12 to $13 on Jan. 1, 2022 and has been increasing $1 each year.
“And guess what? The minimum wage increase is about 10% a year. So, we’re helping those small businesses pay for something that the Legislature thought was important,” Emigholz said. “… This bill is going to benefit small businesses that were struggling because of COVID, struggling because of minimum wage, struggling because of the workforce crisis, struggling just period because we know New Jersey is not always easy for our small businesses for a variety of reasons.”
A provision was removed from the bill that would have increased the credit to 20% in counties where the unemployment rate exceeds the state unemployment rate.
Michael Symons is State House bureau chief for New Jersey 101.5. Contact him at email@example.com.