Businesses in New Jersey, like everywhere else, are up against it these days.
Things could get even tougher in July 2021 if an automatic tax is triggered to replenish the depleted unemployment trust fund and repay a federal loan the state accessed to continue paying unemployment benefits. Christopher Emigholz of the New Jersey Business and Industry Association said the loan repayment though, is reversible.
“The federal government could forgive those loans and just say, ‘You know, we advanced you that money, but it was a crisis or emergency, we don’t want the states or employers to have to be burdened with that,” he said.
Businesses could be hit with a 1-2 punch in 2021. Governor Phil Murphy’s proposed budget would make permanent a 2.5-percentage point tax increase on corporate income. Emigholz said with the unemployment tax looming, Trenton should be cautious about placing any additional taxes on business. “It makes it even scarier to contemplate some of the discretionary or voluntary taxes that are being contemplated right now,” he said, “because no one is gonna have any control over if this tax happens, so why don’t we take the ones that we do control and make sure they don’t happen?”
He says with businesses struggling, a hike in the unemployment tax could ironically keep companies from hiring more workers. “Does that mean that you can’t hire that new person that you wanted to hire next year when you were planning to expand?” Emigholz asked. “Does that mean you can’t expand the benefits you offer? Does that mean somebody that’s part-time can’t go full-time?”
More than 1.6 million people in New Jersey have filed for jobless benefits during the pandemic.