Our Dash of SALT Blog provides the most recent developments and changes in state and local tax regulations. Here are the latest updates for New Jersey.
February 17, 2026
New Jersey Streamlines Local Payroll Tax Enforcement
Authored by: Courtney Easterday, MSA, Kiana McGowan, CPA, MBA
On January 20, 2026, New Jersey Gov. Phil Murphy approved Bill S4219, designed to streamline and strengthen the administration of New Jersey’s municipal payroll tax. The measure enhances municipalities’ ability to enforce payroll tax rules, improve collections, and ensure that businesses accurately report and remit what they owe. The law is intended to make payroll tax enforcement more efficient, reducing compliance gaps that have historically created funding challenges for local governments.
This enhanced framework is especially significant for cities like Jersey City, where payroll tax revenue is a critical component of public school funding. By tightening reporting requirements and giving municipalities better access to wage and withholding data, the law helps ensure stable, predictable revenue and reduces the likelihood that taxpayers will need to shoulder the burden when businesses underreport.
The full text of the bill can be accessed here.
If you have questions about local taxes, please reach out to a member of the Withum SALT Team.
February 17, 2026
New Jersey Updates Tax Rules for Intoxicating Hemp-Derived Products
Authored by: Courtney Easterday, MSA, Kiana McGowan, CPA, MBA and Ray Owens, CPA, MST
On January 12, 2026, New Jersey Gov. Murphy enacted P.L. 2025, c.215, aligning the state with recent changes in Federal law and establishing a regulatory and tax framework for intoxicating hemp-derived beverages.
Effective immediately, the sale or distribution—whether in person or online—of hemp beverages that exceed federal THC thresholds is prohibited. The law also immediately prohibits sales to minors and the sale of synthetic cannabis alternatives.
Beginning April 13, 2026, the statutory definition of “hemp” is amended to exclude:
- Any viable seeds from a Cannabis sativa L. plant that exceeds a total THC concentration of 0.3 percent on a dry-weight basis, including delta-8, delta-10, THC-A, and comparable cannabinoids;
- cannabinoids that are not capable of being naturally produced by a Cannabis sativa L. plant;
- cannabinoids that are capable of being naturally produced by a Cannabis sativa L. plant but are chemically synthesized or manufactured; and
- products containing more than 0.4 milligrams of total THC per container.
Additionally, effective April 13, 2026, the law imposes a $3.75 per-gallon excise tax on wholesale sales or deliveries of intoxicating hemp beverages within New Jersey. A hemp-derived cannabinoid product must contain less than 0.3 percent total THC by dry weight or less than 0.4 milligrams of total THC per container beginning April 16, 2026, and must meet applicable testing, packaging, and labeling requirements. During the transition period, these beverages may continue to be sold until November 13, 2026, but only by licensed liquor distributors, retail liquor licensees, and Class 5 Cannabis Retailers. As of April 13, 2026, intoxicating hemp beverages must also comply with potency limits of no more than 5 milligrams of THC per serving or 10 milligrams per container and must be tested by ISO-accredited, DEA-registered laboratories that meet Cannabis Regulatory Commission standards.
Starting November 13, 2026, any hemp beverage containing more than 0.4 milligrams of total THC per container will be classified as cannabis and may only be legally sold in accordance with the State’s cannabis laws.
The full text of the bill can be accessed here.
If you have questions about state cannabis taxes, please reach out to a member of the Withum SALT Team.
December 18, 2025
New Jersey Issues Update on Federal Renaming of GILTI and FDII Effective After 2025
Authored by: Courtney Easterday, MSA and Kiana McGowan, CPA, MBA
On December 4, 2025, the New Jersey Division of Taxation announced that, beginning with tax years starting after December 31, 2025, the federal “One Big Beautiful Bill Act” (OBBBA) will introduce new terminology for certain international tax provisions:
- GILTI will now be referred to as Net Controlled Foreign Corporation Tested Income (NCTI)
- FDII will become Foreign Derived Deduction Eligible Income (FDDEI)
Importantly, New Jersey’s Corporation Business Tax (CBT) treatment of these items remains unchanged. However, taxpayers should note that older federal materials and prior guidance will continue to reference the former terms. With these updates taking effect for upcoming filing periods, businesses should review their structures, documentation, and compliance procedures now to ensure they understand the new terminology when preparing returns and interpreting both new and historical guidance.
If you have questions about state income tax treatment of foreign income, please reach out to a member of the Withum SALT Team.
September 8, 2025
New Jersey Mediation Pilot Program
Authored by: Breea Boylan, MSA, CPA and Courtney Easterday, MSA
On October 1, 2025, the New Jersey Division of Taxation is launching a pilot mediation program. Mediation will offer a new option, allowing taxpayers to resolve certain types of state tax controversies, thereby reducing the number of protests that progress to the Conference and Appeals Branch (“CAB”) and the complaints filed with the New Jersey Tax Court. Mediation involves an informal meeting between staff from Taxation’s Audit Branch and a taxpayer and/or the taxpayer representative with a trained mediator who will guide the discussion and process. Taxation employs the assigned mediator. The Pilot will run for 24 months from October 1, 2025, through September 30, 2027. The Pilot will be limited to controversies involving Corporation Business Tax (“CBT”) and Sales and Use Tax (“S&U”), for all business entity types. Penalties and interest associated with such controversies can also be mediated. Taxation will screen Applications for Mediation (Form NJ-MED-1) to ensure that applicants are appropriate candidates and have a reasonable opportunity for resolution. Applications for Mediation will be rejected if the subject matter of the controversy is not within the above-identified approved categories.
If you have questions about how New Jersey’s pilot mediation program can help you resolve a state tax audit, please reach out to a member of the Withum SALT Team.
August 4, 2025
New Jersey Waives Penalties for Partnership Tax Miscalculations
Authored by: Emilia Jarrin and Penny Sweeting
In 2023, New Jersey enacted P.L. 2023, c.96, which required partnerships and LLCs to begin using the same apportionment methodology as the Corporation Business Tax (i.e., single factor sales and market-based sourcing) effective January 1, 2023. Before 2023, New Jersey partnerships were required to file using three-factor apportionment with Cost of Performance sourcing. The Division has noticed that some taxpayers were slow to adopt the required change and is offering penalty and interest relief for taxpayers who failed to update their apportionment beginning with the 2024 NJ-1065 return. To qualify, partnerships must show that the charges stemmed from using the outdated calculation. They must also adjust and pay their third and fourth quarter 2025 estimated tax based on the correct 2024 nonresident partner calculation. Relief is available only after penalties and interest are formally assessed and billed, and the request must be sent to the address shown on the billing notice, referencing reliance on the pre-2024 method.
If you have questions about state penalty and interest abatement, please reach out to a member of the Withum SALT Team.
July 17, 2025
New Jersey Increases Additional Fees and Shifts Liability to Sellers
Authored by: Courtney Easterday, MSA and Joe Petrucci
New Jersey has enacted legislation that increases the real property transfer fees for sales exceeding $2 million, effective on or after July 10, 2025. The updated structure imposes the following rates: 2% on transfers over $2M up to $2.5M; 2.5% on amounts over $2.5M up to $3M; 3% on amounts over $3M up to $3.5M; and 3.5% on amounts over $3.5M. Additionally, sellers—not buyers—are now responsible for paying both the additional fee and the controlling interest transfer tax for applicable transfers over $1 million. Sellers may claim a refund for any excess over 1% if the transfer is recorded on or before November 15, 2025, under contracts fully executed before July 10, 2025.
If you have questions about Real Property Transfer Tax, please reach out to a member of the Withum SALT Team.
July 17, 2025
New Jersey Provides Exemption for Sales-Qualified Small Business Stock
Authored by: Courtney Easterday, MSA and Joe Petrucci
Effective for tax years beginning on or after January 1, 2026, New Jersey will allow for gross income tax exemption for capital gains or income from the sale or exchange of qualified small business stock (QSBS), mirroring the federal exemption under IRC § 1202. Under federal law, gains on QSBS held for more than five years may be excluded from income, subject to a cap of the greater of $10 million (reduced by prior eligible gains) or 10 times the taxpayer’s aggregate adjusted basis in the disposed QSBS during the tax year.
If you have questions about exemptions, please reach out to a member of the Withum SALT Team.
July 1, 2025
New Jersey Rejects Taxpayer’s Claims in Sales Tax Audit
Authored by: Bonnie Susmano, JD, MBA and Brandon Spinella
A Corporate officer’s claim of a sales tax audit not being final due to the state never providing him or the corporation the opportunity to contest the assessment at a post-audit conference was rejected by the New Jersey Court. The corporation had a heavy sales tax liability and filed for bankruptcy. New Jersey determined that they would collect from the responsible party’s corporate officer since the state could not collect from the corporation itself. The corporate officer’s claim of no post-audit conference did not hold up, as the state was able to establish that the corporation was responsible for the failure to hold the post-audit conference. The taxes were assessed legally, making the corporate officer responsible for those taxes as the responsible party.
If you have any questions about sales tax audits, please reach out to a member of the Withum SALT Team.
June 3, 2025
New Jersey Adopts Regulations for AI Tax Credit
Authored by: Breea Boylan, MSA, CPA and Penny Sweeting, CPA
The New Jersey Economic Development Authority (NJEDA) has adopted regulations for the implementation of the Next New Jersey (AI) Program, relating to investments in artificial intelligence (AI) and AI-related industries. This provides tax credits to eligible businesses to offset against their state tax liability and for companies to engage in building and fostering New Jersey’s fast-growing AI ecosystem. Additionally, these tax credits are transferable under the program. AI businesses or divisions must primarily be engaged in the artificial intelligence or large-scale artificial intelligence data center industry. The tax credit amount to an eligible business is calculated based on the lesser of:
- 0.1 percent of the eligible business’s total capital investment multiplied by the number of new full-time jobs; or
- 25 percent of the eligible business’s total capital investment; or
- $250 million.
A project must meet specific criteria to be eligible for the Next NJ Program-AI support.
If you have questions about New Jersey taxes, please reach out to a member of the Withum SALT Team.
June 3, 2025
New Jersey Expands Grant for Small Businesses Affected by Route 80 Closure
Authored by: Brian Meier, MSA and Katie Nguyen, CPA
The New Jersey Economic Development Authority (NJEDA) has approved an additional $500,000 to expand its Route 80 Business Assistance Grant Program, originally limited to Morris County, to now include all small businesses within five miles of Exit 34, regardless of county. This expansion aims to support businesses suffering revenue losses from prolonged detours caused by sinkhole repairs. Grants ranging from $1,000 to $15,000 will be available, with eligibility extended to towns like Hopatcong in Sussex County, which were previously excluded. Governor Phil Murphy emphasized the urgency of delivering aid, while local legislators praised the NJEDA’s responsiveness and commitment to helping affected businesses recover. The application period runs from May 29, 2025, at 10:00 a.m. and close on June 4, 2025. For more information, please refer to the NJEDA’s website.
If you have questions about state disaster relief provisions for businesses, please reach out to a member of the Withum SALT Team.
June 3, 2025
New Jersey Issues Tariff Guidance – Tariffs Included in the Tax Base for Sales Tax Purposes
Authored by: Bonnie Susmano, JD, MBA and Jessie Racioppi, MSA
On May 20, 2025, the New Jersey Division of Taxation clarified tariffs on foreign goods are included in the price for sales tax purposes, even if separately stated on the bill or invoice. If a seller passes the cost of tariffs to the customer, it becomes part of the sales price and is subject to sales tax. Pursuant to the New Jersey Sales and Use Tax Act, sales price is the total consideration for which personal property or services are sold.
If you have questions about sales tax, please reach out to a member of the Withum SALT Team.
April 29, 2025
New Jersey Is Making Major Upgrades to Their Tax-Filing System
Authored by: Katie Nguyen, CPA and Brandon Spinella
The New Jersey Division of Taxation is modernizing its tax-filing system through a multi-phased process. This upgrade will require the Division to temporarily shut down certain tax filing and payment systems. Starting April 26, 2025, the online filing and payment systems will be temporarily unavailable, and the telephone-based Sales Tax filing system will be permanently discontinued. Beginning May 14, 2025, online filing and payment systems will be fully restored and available. All returns and payments due from May 1, 2025, through May 30, 2025, will receive a 30-day extension with no penalty and interest being applied due to the unavailability of online systems due to the phase 1 upgrade. Taxpayers will be able to set up an account on the NJ Tax Portal beginning May 14. The taxpayer ID, four-digit PIN, and line 1 of a recently filed return will all be needed to set up a portal. If taxpayers do not have their four-digit PIN, they can request it on the Business Tax/NJ Tax Portal PIN Requests page.
If you have any questions about NJ’s new tax portal setup, please reach out to a member of the Withum SALT Team.
March 10, 2025
New Jersey Proposed Additional New and Revised Regulations Change Corporation Business Tax Significantly
Authored by: Bonnie Susmano, JD, MBA and Joe Petrucci
The New Jersey Division of Taxation proposed new and amended rules to align with 2023 legislation (A.B. 5323) that significantly revises the State’s corporation business tax (CBT) for tax years ending July 31, 2023, and after. Written comments on these proposed changes are due no later than April 19, 2025. Key updates include an increase in the net global intangible low-taxed income (GILTI) deduction to 95% by classifying GILTI as a dividend, changes to the combined reporting rules, adopting the “Finnigan” sourcing method, creating a limited exception for decoupling from IRC Section 174, modifying the dividends received deduction (DRD) and Net Operating Loss Deduction (NOLD) calculations, and changing the New Jersey corporate tax return due date(s).
If you have questions about New Jersey’s proposed CBT changes, please reach out to a member of the Withum SALT Team.
March 10, 2025
New Jersey’s Four-Year Statute of Limitations Does Not Bar Responsible Person Notice of Tax Liability
Authored by: Bonnie Susmano, JD, MBA and Joe Petrucci
The New Jersey Superior Court Appellate Division has affirmed a tax court ruling that the four-year limitation period for assessing additional sales and use tax does not apply to a Notice of Finding of Responsible Person for Sales and Use Tax (SUT) when the corporation previously acknowledged the additional tax liability. The case involved sales and use taxes collected by the corporation but not remitted to the State. The court upheld the decision that there is no time limit for issuing a Responsible Person Notice because Responsible Person liability is a collection tool for a previously determined tax liability and not an additional assessment. Gill v. Director, Division of Taxation (N.J. Super. Ct. App. Div., Dkt. No. A-3116-22, 02/05/2025), affirming the New Jersey Tax Court’s previous decision (Dkt. No. 004035-2021, 05/01/2023).
If you have questions about personal responsibility for state taxes, please reach out to a member of the Withum SALT Team.
March 5, 2025
New Jersey Proposes Corporation Business Tax Nexus Rules
Authored by: Chao Zhang and Katie Nguyen, CPA
New Jersey’s Division of Taxation plans to formalize its corporation business tax (CBT) nexus standards through new regulations. That nexus standard currently states that if a business has more than $100,000 in New Jersey gross receipts or more than 200 transactions to New Jersey customers, then the business has a filing obligation for New Jersey CBT purposes. The guidance also states that certain foreign entities that do business in New Jersey, like those in financial services, digital assets, online subscriptions, and various internet-based transactions, must pay New Jersey CBT if their activities exceed the Division’s economic nexus thresholds. The rules specifically indicate:
- Selling financial products, offering investment services, or handling digital asset transactions; and/or
- Providing online services such as warranty contracts, post-sale support, marketing data collection; and/or
- Streaming services and digital subscription-based offerings
Sold to New Jersey customers all give rise to New Jersey source receipts and may give rise to economic nexus in the state if the business exceeds the Division’s thresholds.
If you have questions about state economic nexus rules, please reach out to a member of the Withum SALT Team.
March 5, 2025
New Jersey Proposal Prospectively Conforms the State to the MTC’s P.L. 86-272 Restatement
Authored by: Chao Zhang and Katie Nguyen, CPA
New Jersey has also proposed regulations that conform the state to many aspects of the MTC’s restatement on P.L. 86-272. Pursuant to the proposed regulations, the Division takes the position:
- Soliciting employment applications online (except for sales positions);
- Placing “internet cookies” on computers of in-state customers to gather market or product research;
- Providing post-sales assistance through an electronic chat, email or app;
Break P.L. 86-272 protections according to the Division. If these regulations are adopted, they are prospective in their application.
If you have questions about states’ application of P.L. 86-272, please reach out to a member of the Withum SALT Team.
February 25, 2025
New Jersey Releases Gross Income Tax Bulletin on Retirement Income
Authored by: Brandon Spinella and Penny Sweeting, CPA
The New Jersey Division of Taxation released a tax bulletin related to the treatment of tax of retirement income. This includes annuities, pensions, IRAs, and COVID-related distributions. The bulletin explains how to calculate taxable income. In addition, it outlines excludable portions of different retirement plan distributions, eligibility for exclusions like the pension exclusion, reporting requirements, and other retirement income exclusion. It also includes special rules for survivors and beneficiaries accepting inherited retirement benefits.
If you have questions about New Jersey Gross Income Tax, please reach out to a member of the Withum SALT Team.
December 17, 2024
New Jersey Interest Rates for 2025
Authored by: Breea Boylan, MSA, CPA and Courtney Easterday, MSA
The New Jersey Division of Taxation has issued Technical Bulletin TB-21(R) announcing the interest rate on outstanding tax balances for January 1, 2025, to December 31, 2025, has been lowered to 10.75%. The prior rate for January 1, 2024 to December 31, 2024 was 11.5%.
If you have questions about state interest rates on under and overpayments, please reach out to a member of the Withum SALT Team.
December 3, 2024
NJ EDA Increases Grant Funding for Local Manufacturers With Round 3 Voucher Program Starting Q1 2025
Authored by: Kiana McGowan, CPA, MBA
The NJ MVP Phase 3 aims to support New Jersey manufacturers by providing reimbursement grants for purchasing equipment that enhances efficiency, productivity, and profitability. The program has a total allocation of $10 million, with awards covering 30% to 50% of eligible equipment costs, capped at $250,000 per company. The program targets priority sectors such as but not limited to life sciences, clean energy, offshore wind, advanced transportation, and logistics, with additional bonuses for small businesses, certified women, minority, and veteran-owned businesses, and those purchasing from New Jersey manufacturers.
To ensure equitable access, Phase 3 prioritizes new applicants who have not received grants in previous phases during the initial two-week application period. Eligible projects must have a minimum total cost of $25,000 and involve the purchase and installation of new or used manufacturing equipment in New Jersey. The equipment must be used in the manufacturing process and meet advanced manufacturing definitions, including technologies like robotics, additive manufacturing, and advanced sensor systems.
The application process involves submitting an online application with a $1,000 non-refundable fee. Approved applicants must order the specified equipment within 30 days of the effective date of the Closing Voucher Agreement. The program aims to support the growth and modernization of New Jersey’s manufacturing sector by facilitating access to advanced manufacturing technologies.
The Phase 3 application is set to open in Q1 of 2025. It is critical to stay on top of the application opening, as in prior phases, applications are filled within 2-3 days after opening. You can opt-in for email alerts from the NJ EDA on this program by filling out the application form here.
To apply for the NJ MVP Phase 3, applicants need to prepare and submit the following documents:
- Company formation documents
- Equipment quotes or third-party cost justifications
- NJ Tax Clearance Certificate (required before approval)
- NJ State certifications (for bonuses: Woman, Minority, Veteran-Owned Businesses)
- NJ WR-30 (if ≤ 100 full-time employees, raises award cap to 50%)
- Signed and completed Employee Log (if ≤ 50 full-time employees, 5% bonus)
- Collective Bargaining Agreement (if applying for the 5% bonus)
Questions can be submitted ahead of the application to the MVP program team at [email protected].
For more detailed information on program details and eligibility, you can visit the NJEDA NJ MVP Phase 3 page.
If you have any questions about this update, please contact the Withum SALT Team.
November 4, 2024
New Jersey Phases Out Sales Tax Exemption on Zero Emission Vehicles and Eliminates Sales Tax Holiday
Authored by: Emilia Jarrin and Katie Nguyen, CPA
On June 28, 2024, New Jersey Gov. Murphy signed A4702 which phases out the sales tax exemption on zero emission vehicles and eliminates the sales tax holiday on school supplies and sporting equipment effective October 1, 2024. Starting October 1, 2024, zero emissions vehicles are subject to a 3.125% sales tax. Starting July 1, 2025, zero emission vehicles will be subject to the regular sales tax of 6.625%.
Furthermore, the sales tax holiday on school supplies and sporting goods that previously occurred from August 24 to September 2, 2024, will be the Garden State’s last pursuant to A4702.
If you have questions about state sales tax exemptions and sales tax holidays, please reach out to a member of the Withum SALT Team.
November 4, 2024
New Jersey Tax Deadline Extended to Disaster Victims
Authored by: Breea Boylan, CPA and Courtney Easterday, MSA
The New Jersey Division of Taxation follows federal guidelines provided by the IRS for special tax relief for taxpayers in the Presidential Disaster Relief Areas. Affected taxpayers include businesses and individuals located in the affected areas, those whose tax records are in the affected areas, and relief workers. Businesses affected by an event designated as a Presidential Disaster and received a late filing or late payment penalty notice from the division, should respond by requesting tax relief and indicating that you are in a “Presidential Disaster Relief Area” and state the disaster. The New Jersey Division of Taxation reminds taxpayers of their policy to follow IRS guidelines for taxpayers in Presidential Disaster Relief Areas following the recent Hurricanes.
If you have questions about state disaster relief provisions, please reach out to a member of the Withum SALT Team.
October 11, 2024
New Jersey Updates Artificial Intelligence Investment Tax Credit
Authored by: Katerine Velasquez and Penny Sweeting, CPA
The New Jersey Economic Development Authority (“NJEDA”) administers a tax credit intended to encourage investment in New Jersey in the AI and AI-related industries. To obtain the tax credit, an eligible business must pre-qualify with the NJEDA and pay an application fee. The criteria for qualification include:
- The business will create at least 100 new full-time jobs in the state;
- The business will make at least a $100 million capital investment in the state;
- The business will enter a collaborative relationship with a private research university, a New Jersey-based public or technology startup company, or both; and
- For construction contracts valued at more than $2,000, the project complies with the NJEDA’s affirmative action requirements.
If you have questions about whether your business may qualify for New Jersey’s AI Investment Tax Credit, please contact a member of the Withum SALT Team.
Applications for the tax credit must be submitted by March 1, 2029. The exact date for the opening of applications has not yet been announced and taxpayers can expect to apply through the NJEDA website.
If you have questions about state credits and incentives, please reach out to a member of the Withum SALT Team.
Disclaimer: Please note that this information is readily available at this time and is subject to change, so please consult your Withum tax advisor.
Have Questions or Need Guidance?
For more information on this topic, please contact a member of our team.