New Jersey Corporate Business Tax Surtax ImposedJuly 2, 2024

by David Engel CPA

On June 28, 2024, Governor Phil Murphy signed a law that imposes a 2.5% surtax, referred to as the Corporate Transit Fee, on certain corporation business taxpayers (CBT) that have a New Jersey allocated taxable net income in excess of $10 million for tax years beginning on and after January 1, 2024 and on or before December 31, 2028. (L. 2024, A4704 (c.20), effective retroactively to tax years beginning on or after January 1, 2024.)

Application of fee. “Allocated taxable net income” means the same as the term “taxable net income” is defined in the Corporation Business Tax Act ( N.J. Rev. Stat. § 54:10A-1 et seq.) for purposes of calculating a taxpayer’s CBT liability. The Corporate Transit Fee is imposed in addition to the taxpayer’s regular CBT liability, except that the surtax is not imposed on any S corporation or public utility. No credits are allowed against the corporate transit fee, except for credits for installment payments, estimated payments made with request for an extension of time for filing a return, or overpayments from prior tax years.

Prior surcharge. For tax years beginning prior to January 1, 2024, New Jersey imposed a surcharge of 2.5% for taxpayers with allocated taxable income of $1 million or more. That surtax expired for tax years beginning after December 31, 2023. The surcharge applied on all allocated income once the $1 million or more threshold was reached.

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