N.J. Ends Reciprocal Tax Agreement With Pennsylvania

The reciprocal tax agreement between New Jersey and Pennsylvania will be no more come Jan. 1.

N.J. Gov. Chris Christie decided Friday to end the nearly 40-year tax agreement among the neighboring states, multiple news outlets are reporting.

According to U.S. Census data, more than 46,000 Bucks County residents work in New Jersey and would be impacted by Christie’s proposal by having to pay New Jersey’s progressive income tax rate instead of Pennsylvania's flat income tax rate of 3.07 percent, according to information from Pennsylvania State Rep. Steve Santarsiero's office.

New Jersey's income tax rate fluctuates between 5.525 percent and 8.97 percent for those earning more than $40,000, according to the Trentonian newspaper.

“Today’s action was made necessary by the legislature irresponsibly creating a $250 million state budget hole in June,” the Republican governor said in a statement obtained by the Trentonian. “They assumed public employee health insurance savings but did not give me the tools to make those savings real. I will not raise state taxes, cut property tax relief, reduce aid to education or our hospitals, or reduce the state’s record pension payment to cover for this blunder by the legislature.”

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