Small business owners with the Main Street Alliance of New Jersey joined New Jersey State Senator Raymond Lesniak and allies Monday in urging the state legislature to vote on a proposed bill that would close corporate tax loopholes for multi-state corporations.
If signed into law, the "combined reporting" bill would help level the playing field for small business owners while raising nearly $300 million in additional state revenue.The bill passed through the Senate Budget and Appropriations Committee earlier this year, and awaits a floor vote on Thursday. It has been introduced in the State Assembly, New Jersey's lower legislative house, but has yet to brought to committee votes there.
At a press conference in Trenton small business owners Marilyn Sealy, Jill Sasso, and Barbara Stanton called first and foremost for tax fairness.
“All businesses benefit from the public services, education, and infrastructure that New Jersey has to offer,” said Jill Sasso of Lawrenceville Provisions in Lawrenceville." I’m here to ask the state legislature to make sure that all multi-state corporations pay their fair share for these services.”
Combined reporting treats the parent company and subsidiaries of multi-state corporations as one entity for state corporate income tax purposes. Without combined reporting, such corporations can shift profits across state lines, and end up paying a lower effective tax rate than small businesses. The New Jersey Office of Legislative Services estimates that closing these tax loopholes could raise an additional $290 million in state revenue to invest in schools, roads, public services and other building blocks of a healthy state economy. More than half the states that levy a corporate business tax now require it.
“I run a family-owned business, and I pay my fair share of taxes and fees,” said Marilyn Sealy, the owner of Wells Rugs Service in Morristown. “I don’t hide my revenue through some P.O. box in another state, and neither should multi-state corporations. New Jersey needs the funding for many public services, and my business shouldn’t be the only one bearing the burden.”
Senator Lesniak, a primary sponsor of the bill, said he understood the frustration small business owners feel and called for his fellow lawmakers to support the proposed law. “They are upset because they have to pay what these multi-national corporations are not paying because they’re using accounting manipulations to avoid paying New Jersey taxes. This will put an end to that," said Lesniak.
More than 50 business owner have signed a letter of support for the law, with dozens more expected to join the campaign in weeks to come.
"Small businesses should not bear the burden of paying for services that benefit all businesses," said Barbara Stanton of Heritage Lighting. "Our state legislature needs to pass combined reporting into law as soon as possible.