New Jersey will implement a 2.5% Corporate Transit Fee on corporations with taxable net income over $10 million, effective for tax years beginning January 1, 2024 through December 31, 2028. This fee is in addition to the state’s existing 9% corporate tax rate, effectively making New Jersey’s corporate tax rate the highest in the nation at 11.5%. The fee is expected to generate $1 billion in revenue and will be used to support NJ Transit, which has been struggling with significant budget deficits and recent service disruptions impacting commuters. This measure targets large corporations, with less than 1% of corporate tax filers in the state affected.
The new fee cannot be offset by tax credits, ensuring that the intended revenue is collected without deductions. No penalties or interest will be imposed on underpayments resulting from the Corporate Transit Fee during its first year of enactment to ease the transition. This initiative is part of a broader effort to secure stable funding for NJ Transit, providing a more reliable and efficient service for the state’s residents. By focusing on a small percentage of the wealthiest corporations, the state aims to balance the need for additional revenue with the impact on businesses, ensuring the continued operation and improvement of critical public transportation infrastructure.
Please contact your WG advisor if you have questions about this or any other tax matter.
