It’s not just the millionaires who are going to pay more. Just about everybody in New Jersey is facing a tax hike beginning on Thursday.
Four tax hikes went into effect on Oct. 1, all of which are expected to have a big impact on your driving and your wallet amid the coronavirus crisis Drivers will have to cough up a lot more to pay for gas. Millionaires will have to pay more to help balance a state budget depleted by business shutdowns amid the pandemic. And there’s also a tax hike that impacts HMOs.
Gas tax hike
The New Jersey gas tax will jump as the state says tries to dig itself out of a financial hole caused by the coronavirus crisis, officials announced on Friday.
The Department of the Treasury announced that lower fuel consumption trends, which have been exacerbated by the COVID-19 pandemic, will necessitate a gas tax increase of 9.3 cents per gallon.
Due to the formula outlined in the law, the tax rate on gasoline and diesel fuel will increase on Thursday from 30.9 cents to 40.2 cents for gasoline and from 34.9 cents to 44.2 cents for diesel fuel, officials said.
HMO tax
This plan increases the current annual assessment on net written premiums of HMOs from 3 to 5 percent and raises an estimated $102.7 million in FY 2021.
The legislation, sponsored by Sen. Nellie Pou, D-Passaic, will increase the assessment on Health Maintenance Organization (HMO) premiums to fund charity care payments to hospitals.
“In a time of great anxiety given the deadly coronavirus pandemic, not to mention uncertainty in regard to the future of Obamacare, and when tens of thousands of New Jerseyans are worried about where they’ll find the money to pay for health care, this HMO assessment is a shot in the arm, and will help bolster the resources that shore up our safety net for those most at risk,” said Pou.
“Because the overwhelming majority of HMO enrollees in New Jersey are covered by Medicaid, the bulk of the $162 million in revenue raised will come back to the state in the form of increased federal Medicaid payments,” Pou said.
Corporate business tax
Murphy and lawmakers agreed to restore a 2.5 percent surtax on the Corporation Business Tax for corporations with taxable net income in excess of $1 million.
The tax was supposed to drop to 1.5 percent this year, and then it was scheduled to be eliminated by the end of 2021. Now it’s extended through 2023.
The tax is expected to yield an estimated $210 million during the 2020-21 fiscal year, Murphy said.
Millionaire’s tax
Lawmakers in New Jersey reached a deal on passing a millionaire’s tax as well as rebates for homeowners. The deal takes effect on Thursday.
Murphy said the coronavirus crisis has had a staggering impact on New Jersey’s economy and the state’s middle class “needed an extra push” since many people have lost their jobs.
The additional revenue will help provide middle-class tax relief and more money for schools, the governor said.. “Now is the time that the wealthiest among us are also called to sacrifice,” Murphy said.
Senate President Steve Sweeney, who has long resisted a millionaire’s tax, said his opposition wasn’t political, but circumstances have changed since the outbreak began in March.
“The pandemic hit and things have changed and we have to face the reality that a lot of families are hurting here,” Sweeney said.
The millionaires tax will mean this: a 10.75 percent marginal tax rate currently imposed on income over $5 million will be imposed starting at $1 million in taxable income. This proposal is expected to raise $390 million in FY 2021, officials said.
The deal includes a $500 rebate to families with at least one dependent child whose households earn less than $150,000 per year. The rebate will apply to families with a single parent earning $75,000 or less.
The rebate checks will be based on tax filings next April, so Murphy said he expects New Jersey homeowners will get them during the summer of 2021.
Sweeney and many Republicans have long opposed a millionaire’s tax because they feared it would drive more business and industry out of the state.
Cosmo Insurance Agency is a full-service independent insurance agency based in Hackensack (Bergen County) and Lakewood (Ocean County), New Jersey that offers an all-encompassing range of insurance options for both individuals and businesses. Cosmo keeps its promise to assure an efficient and creative approach to the services we offer. Each of our clients experience a personalized and long-term relationship with us. Our New Jersey based team of health brokers guides our clients in helping them choose the most cost-effective options. By incorporating our knowledge of the insurance guidelines for healthcare, employee benefits, life insurance, self-insurance, dental, disability, and long term care insurance, we keep our clients up-to-date with affordable plans that cover all their specific insurance needs.
CONTACT COSMO NOW
GET A QUOTE NOW
LEARN MORE ABOUT HEALTH INSURANCE
Source: Patch
