5 New Tax Hikes, Fees In NJ Start Now

You may be saying, "Happy New Year!" but you may also be grumbling a bit when you go to a store, do your taxes and check you pay stubs this month – just as 19 new laws take effect in New Jersey.

That's because you may find yourself paying any number of tax hikes and new fees that, for many New Jerseyans, essentially go into effect on Tuesday. Or you may find yourself paying fines that you didn't expect to see.

Granted, many New Jerseyans will likely escape the additional tax burden. Not many make $5 million a year, so you won't have to worry about paying the new multi-millionaire's tax.

Some of these new plastic bag fees already went into effect in a number of communities, or they won't go into effect until the summer. Some, however, chose January as the date to pay more at the supermarket. It's also the date to pay more if you don't have health insurance.

You can find out more about specific law changes here: 19 New New Jersey Laws In 2019 That Could Change Your Life. But here are tax hikes and fees that are taking effect:

Multi-Millionaire's Tax

New Jersey has imposed a new multi-millionaire’s tax, a 10.75 percent rate on earners who make $5 million or more.

Individual income of more than $5 million is now taxed at 10.75 percent, regardless of the taxpayer's filing status.

Employers must withhold Gross Income Tax at the rate of 15.6 percent from salaries, wages, and other remuneration paid for services rendered in excess of $5 million during the taxable year.

Health insurance

Gov. Phil Murphy signed legislation, A-3380, that restores the mandate – just for New Jerseyans – that everyone must obtain health insurance or pay a tax. The law became effective Tuesday.
Murphy took the step after Congress essentially gutted the federal Obamacare mandate in December 2017.

The mandate fee imposed by the law will be assessed and collected in the same manner as the income tax, with the commissioner of Banking and Insurance establishing a program for determining whether to grant exemptions for "religious conscience or hardship," lawmakers say.

The "New Jersey Health Insurance Market Preservation Act" was part of a two-bill legislative package, sponsored by Assembly members John McKeon, Carol Murphy and Pamela Lampitt, that lawmakers say will "protect New Jersey from President Trump's effort to dismantle the Affordable Care Act and preserve the health care benefits provided by the law to the state's residents."

The new law maintains the viability of the individual mandate and establish a reinsurance fund to help stabilize the insurance market, the lawmakers say. The ACA has expanded health insurance coverage to more than 800,000 New Jersey residents, including some 340,000 who purchased policies through the individual market.

"President Trump's efforts to destabilize the health insurance market will only lead to higher costs for New Jersey residents unless we take common sense action to preserve the benefits the Affordable Care Act has been providing to our residents," said McKeon, D-Essex, Morris. "We cannot stand idle as our residents are put at risk. We fought long and hard to get more people insured in New Jersey, because it's both fiscally and socially responsible. We will continue that fight because it's the right thing to do."

Corporate business tax hike

A corporate business tax surcharge was approved that averages 2 percent over 4 years.
For the first 2 years, the surcharge is 2.5 percent, which will provide $425 million. The third and fourth year will be 1.5 percent.

Local payroll tax hike

This one may not impact you now – but it eventually could. And in one New Jersey community, thousands of workers will feel the pinch starting on Tuesday.

Murphy signed A-4163, which allows municipalities that have a population over 200,000 to impose an employer payroll tax. These payroll tax revenues are then disbursed to the respective school districts.

The measure was intended to allow Jersey City, and other communities like it, to make up for any decreases in state aid.

An ordinance was subsequenly approved by the Jersey City Council that requires businesses to pay a 1 percent tax on the payroll of out-of-town employees starting Jan. 1.

Plastic bag fees

A number of New Jersey communities imposed fees on plastic bags, citing their potential damaging impact on the environment, that will cost you more at the supermarket or elsewhere.

Somers Point, for expample, passed an ordinance requiring stores to impose a 5-cent fee on plastic bags.

It's not immediately clear when that law was supposed to take effect. ShopRite in Somers Point and other news sources said the law was supposed to take effect on Tuesday, but the supermarket posted on Facebook that the bag fee ordinance will take effect on Jan. 7.

Others that have passed plastic bag fees, according to NJ101.5, are Avalon, Beach Haven, Belmar, Bradley Beach, Brigantine, Harvey Cedars, Hoboken, Jersey City, Lambertville, Long Beach, Longport, Monmouth Beach, Point Pleasant Beach, Stafford, Stone Harbor, Teaneck and Ventnor City.

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