![]() In 2020, according to data from the State Department of Community Affairs, property taxes in the state averaged $8,161 per home, a 2.2% increase over the level of the previous year. The state also ranked highest of all states in property tax collections per capita in fiscal year 2018 at $3,378, ahead of New Hampshire ($3,362), Connecticut ($3,107) and New York ($3,025), and compared to the average for all states of $1,675 per capita. T he national average for all states was $4,420 per capita and 9.9% of total income. New Jersey had a 22.3% increase.Ī study released in May 2021 reported that New Jerseyans pay on average a grand lifetime total in all federal, state and local taxes of $931,698, the highest tax burden of all states, ahead of #2 Massachusetts at $827,185 and #3 Connecticut at $805,213. Nationwide, taxpayers pay $525,037 over their lives, which includes taxes on income, property, cars and retail spending, according to the report.Ī ccording to the report released in 2021 by the nonprofit Tax Foundation based in Washington, D.C., the most recent national state tax burden comparisons (for calendar year 2019) showed New Jersey with the seventh highest tax burden with 11.7% of income required to pay state and local taxes and ,$8,134 per person in its population behind New York with the highest burden of 14.1% of income and $9,987 per capita. According to IRS data, 23,950 tax returns were filed in New Jersey with $1 million or more in adjusted gross income in 2020, up from 22,720 the prior year. At the same time, however, a new individual income tax bracket with a rate of 10.75% was created, the third-highest in the country, along with a corporate income tax surcharge on companies with income of $1 million or more, raising their tax rate to 11.5%-.the highest statutory corporate tax rate of all states followed by Pennsylvania (9.99%) and Iowa and Minnesota (both at 9.8%).ĭespite critics who contended the state's high tax rates on upper-income residents would drive relocations to lower-tax states, the number of millionaires in New Jersey increased by 5.4% from 2019 to 2020. (Some municipalities have 'Urban Enterprise Zones' where qualifying sellers may collect and remit sales tax at a 3.3125% rate, half the 6.625% statewide rate). New Jersey completed the phaseout of its estate tax in 2018 and reduced its sales tax rate from 6.875% to 6.625%, completing a two-year revision which also imposed higher gas tax rates. Even after the additional revenues provided by the income tax, New Jersey local governments remain heavily dependent, compared to most states, on their taxation of real estate in financing schools and local government operations, The income tax was approved only after the state Supreme Court ordered the closing of public schools, placing intense pressure on the legislature to force passage of the tax. After failed attempts in the 1960s by both Governor Hughes and Governor Cahill, the state became one of the last to enact an income tax, which was signed by Governor Byrne in 1976. ![]() It was not until the 1950s that the state enacted a sales tax-its first statewide tax on the general public. ![]() Toward the end of the nineteenth century, New Jersey was branded by the muckraking journalist Lincoln Steffens as the "traitor state" for its weak corporate regulation intended to attract trusts and monopolies to establish their legal domiciles in the state in return for fees which again allowed the state government to avoid taxing its own citizens. In the nineteenth century, the state's efforts to avoid taxing its residents resulted in its being derided as the "state of the Camden and Amboy" for the corrupt influence of the dominant railroad monopoly on state government. The collection of state taxes is the responsibility of the Department of the Treasury, primarily through its Division of Taxation (tax filing, processing and collection) and its Division of Revenue and Enterprise Services (business registration and tax payment services).įor most of its history, the state lacked a statewide general tax, relying largely on revenues from railroad taxes and fees, a variety of business levies and sales of state property such as tidelands. The legal authority to impose taxes in New Jersey is derived from the 1947 State Constitution and implementing laws codified in Title 54 of the New Jersey Statutes Annotated (hereafter N.J.S.A.). ![]()
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