Controversial CBT Clean-Up Bill Signed Into Law

By Jeff Kaszerman, NJCPA Vice President of Government Relations – October 5, 2018
Controversial CBT Clean-Up Bill Signed Into Law

On Oct. 4, Governor Murphy signed A4495 into law. This legislation was originally intended to “clean up” the corporate business tax (CBT) bill that was enacted with the budget on July 1. That bill had many provisions with vague wording that made it difficult for companies to comply with.

The business community and the NJCPA supported the original version of A4495, however it was changed the previous weekend into a bill that was vehemently opposed by business organizations. It now taxes 50 percent of Global Intangible Low-Taxed Income (GILTI), making New Jersey a national outlier in its tax treatment of GILTI. New Jersey is now the only state, other than Maine, to tax 50 percent of GILTI.

The new law also reverses current law, which preserves the value of net operating losses (NOLs) when there is a dividend-received deduction. Existing treatment of NOLs puts New Jersey in line with virtually all other states in the country. By undoing this law, small and medium-sized startup companies that often don't turn a profit in their early years will now be penalized.

The NJCPA will work with other business groups and lawmakers to seek changes to these onerous provisions.

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 directors 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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