By Jon Whiten
‘Combined reporting,’ a common practice in other states, would also provide resources needed to grow the economy and meet the state’s growing needs
Thirty-seven New Jersey organizations representing hundreds of thousands of state residents are today sending a letter to the state legislature asking lawmakers to promote tax fairness for small, local businesses by closing corporate tax loopholes.
The letter, signed by a spectrum of community, labor, faith, environmental and social justice groups, shows widespread and deep support for what’s known as “combined reporting.” This treats the parent company and subsidiaries of multistate corporations as one entity for state corporate income tax purposes. Their nationwide profits are added together and the state then taxes the appropriate share of the combined income.
With recent enactment in Rhode Island and Connecticut, 25 out of the 45 states that have some form of corporate income taxation, plus the District of Columbia, now mandate combined reporting. In fact, this important reform has become so commonplace in other states that nearly all of New Jersey’s largest employers already use it when filing state taxes elsewhere, according to research by New Jersey Policy Perspective (NJPP), which has led recent efforts to enact combined reporting in New Jersey.
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