Measures approved by Budget Committee could provide $400 million in tax relief.
Proposal to Eliminate Estate Tax Advances in Senate
There may finally be a small piece of good news coming out of Trenton: The Senate Budget and Appropriations Committee approved two bills that would cut taxes in New Jersey.
One bill, S1728, would phase out the estate tax over five years, increasing the exclusion amount each year until the tax is eliminated. The estate tax exemption threshold would increase to $1 million (from $675,000) on Jan. 1, 2017; to $2.5 million in 2018; to $3.5 million in 2019; and to $5 million in 2020. On Jan. 1, 2021, there would be no estate tax imposed in New Jersey. The federal estate tax exemption is $5.45 million.
“We see a greater outward migration of people year after year, and if the estate tax is repealed as was recommended by the Budget Committee, we will certainly see more and more businesses reconsidering their departure,” NFIB/New Jersey State Director Laurie Ehlbeck said in a statement. “It is incredibly important that people be aware that when small employers close up shop and move out of state, they take the jobs they offer our community with them as well. Repealing the estate tax is a great step in improving our overall economy for the long term not just for the small business community, but for New Jerseyans hoping to retire in their home state as well.”
The Budget Committee also approved S998, which would increase the exemption on retirement and pension income. For married couples filing jointly, the threshold would be raised from $20,000 to $100,000 over three years, and for individuals, the threshold would increase from $15,000 to $75,000.
According to the Senate Majority Office, the two measures combined would provide about $400 million in tax relief.