Tax Bill Supported by NJCPA Passes Assembly

By Jeff Kaszerman, NJCPA Government Relations Vice President – June 30, 2022
Tax Bill Supported by NJCPA Passes Assembly

NJCPA-supported legislation (S2876, A4295) that would make administrative changes to New Jersey's gross income tax and corporation business tax (CBT) passed the Assembly on June 29. The bill is also supported by the state Treasurer and many business groups.

This bill would make various changes to the administration of the gross income tax and the CBT by adapting a new federal partnership audit regime, ending COVID-related extensions concerning certain state taxes and eliminating the requirement to affirmatively elect New Jersey S corporation status. The bill would also provide for an opt out of the automatic S corporation election.

Following are highlights of the bill:

  • Remove taxpayer inequity caused by continuance of COVID State of Emergency. The bill would end the imposition of an unfair burden on taxpayers caused by the fact that while the COVID Public Health Emergency has ended, the State of Emergency has not. The bill would end the extension of time for the statute of limitations on tax due would also end the extension for the provisions regarding the state’s payment of interest on a taxpayer’s overpayment of tax. This bill would restore the parity that has always been in place by changing the end dates for the extension of time for the statute of limitations and payment of interest so that the extensions are tied to the end of the Public Health Emergency, as is the case with the extension for refunds.
  • Change S corporation tax filing process for S corporations. The bill would eliminate the requirement that a taxpayer that chooses S corporation status for federal tax purposes must also affirmatively choose S corporation status for New Jersey. The bill would also allow a company that has chosen federal S corporation status to opt out from being classified as an S corporation for New Jersey purposes.
  • Adapt partnership audit regime. The bill would adapt New Jersey gross income tax to the new federal partnership audit regime that audits the partnership for greater efficiency instead of auditing individual partners.  
For further details:

Jeffrey  Kaszerman

Jeffrey Kaszerman

Jeff Kaszerman is the vice president of government relations for New Jersey Society of CPAs. He works with the CEO and board of trustees to create and implement advocacy initiatives that protect and promote the interests of the CPA profession, the business community and the public.

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