New Jersey Tax Bill a Major Step Backward for Recovery Efforts

Following the passage of the Tax Cuts and Jobs Act in 2017, several states applied the federal global intangible low-taxed income structure to their own income tax regime. Some states adopted the structure with additional credits or deductions. Others tied themselves to the federal plan so that changes would flow through.

New Jersey adopted GILTI with a 50% permitted exclusion and allowed for deductions under Section 250 of the tax code for both GILTI and foreign-derived intangible income.

If proposed bill SB 3737 becomes New Jersey law, that 50% permitted exclusion would be expanded to 95%—matching the exclusion rates of ...