Requires State Treasurer to issue report concerning New York's taxation of New Jersey residents' income.

A1255

ASSEMBLY, No. 1255

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman MICHAEL INGANAMORT

District 24 (Morris, Sussex and Warren)

Co-Sponsored by:

Assemblywoman Fantasia

SYNOPSIS

���� Requires State Treasurer to issue report concerning
New York's taxation of New Jersey residents' income.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act
requiring the State Treasurer to issue a report
concerning
New York�s taxation of New Jersey
residents� income.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� The Legislature finds
and declares that:

���� a.���� Thousands of New Jersey
residents, many of whom work from home, have New York income taxes taken from
their paychecks because their employers are located in the State of New York.

���� b.��� New Jersey allows those
residents to claim a tax credit against their New Jersey income tax liability
for the taxes they paid to New York, so that their income is not taxed again.

���� c.���� It is grossly
inequitable that the State of New York receives and retains income tax revenue
from New Jersey residents who may only infrequently and sporadically travel to
New York to conduct business.

���� d.��� The inequity extends to
New Jersey residents who may be required to pay higher New York income tax
rates.

���� e.���� Current inequities have
been growing over time as technology improvements have allowed New York
businesses to decrease office space available to New Jersey residents working
in New York and effectively use New Jersey�s infrastructure and services as
support for their employees.

���� f.���� Current inequities have
further been exacerbated by COVID-19, which is hastening the trend of New
Jersey residents no longer truly working in New York and New York businesses
downsizing New York office space available to New Jersey residents.

���� g.��� With creativity and
affirmative steps, the State Treasurer and the Division of Taxation could
increase revenues available to the State of New Jersey and reduce New Jersey
residents� income tax liabilities if New Jersey aggressively sought to protect
against the State of New York from gaming the tax system in a manner that
drains revenue from the pockets of the New Jersey residents and syphons money
away from the State of New Jersey�s budget.

����� 2.�� Within
six months following the enactment of P.L.
, c. (C. )
(pending before the Legislature as this bill), the State Treasurer shall submit
a report to the Legislature in accordance with section 2 of P.L.1991, c.164
(C.52:14-19.1) concerning New York�s taxation of New Jersey residents� income.
The State Treasurer may contract with a third party to prepare all or a portion
of the report.

����� The report shall include:

����� a.�� an explanation of efforts the State has taken to
address the inequity of New York�s taxation of New Jersey resident�s income,
including any State efforts to educate New Jersey residents and New York
employers of the possible illegality of New York�s taxation of New Jersey
residents who, because of necessity and as required by their employers, are
working from their homes in New Jersey;

����� b.�� the estimated total credits the State has
granted, or will grant, to New Jersey residents for income taxes paid to New
York and its political subdivision in each tax year beginning with Tax Year
2011 and ending with Tax Year 2020;

����� c.
��
a discussion of steps that the State may take to protect
the State of New Jersey�s public fisc, and the paychecks of New Jersey
residents, from New York and its political subdivisions� taxing authority;

����� d.�� an estimate of New Jersey residents� tax savings
should the State be able to shift residents� income tax payments from New York
and its political subdivisions to New Jersey;

����� e.�� a discussion of any New Jersey, New York, or
other state or federal statutory or case law impediments to successfully
achieving equitable taxation of New Jersey commuters working for employers in
New York;

����� f.��� an analysis of how other states and
jurisdictions address the tax implications of residents living in one state and
commuting to another;

�����
g.�� a
discussion of the State�s efforts to participate in the litigation between the
State of New Hampshire and the Commonwealth of Massachusetts concerning
Massachusetts� taxation of New Hampshire residents, or if no efforts have been
made, an explanation of why not;
and

����
h
.��� recommendations as to how the State may resolve the
inequitable tax treatment of New Jersey commuters working for employers in New
York.

���� 3.��� This act shall take
effect immediately.

STATEMENT

����
This bill requires the State Treasurer to issue a report to
the Legislature concerning New York�s taxation of New Jersey resident�s
income.� The report is required to include:

����� (1)� an explanation of efforts the State has taken
to address the inequity of New York�s taxation of New Jersey residents� income,

����� (2)� the estimated total credits the State has
granted, or will grant, to New Jersey residents for income taxes paid to New
York in each tax year beginning with Tax Year 2011 and ending with an estimate
for Tax Year 2020,

����� (3)� a discussion of steps that the State may take
to protect the State of New Jersey�s public fisc, and the paychecks of New
Jersey residents, from New York and its political subdivisions taxing
authority,

����� (4)� an estimate of New Jersey residents� tax
savings should the State be able to shift residents� income tax payments from
New York and its political subdivisions to New Jersey,

����� (5)� a discussion of any state or federal statutory
or case law impediments to successfully achieving equitable taxation of New
Jersey commuters working for employers in New York,

����� (6)� an analysis of how other states and
jurisdictions address the tax implications of residents living in one state and
commuting to another,

����� (7)� a discussion of the State�s efforts to
participate in the litigation between the State of New Hampshire and the
Commonwealth of Massachusetts concerning Massachusetts� taxation of New
Hampshire residents, and

����� (8)� recommendations as to how the State may resolve
the inequitable tax treatment of New Jersey commuters working for employers in
New York.

���� The State Treasurer is permitted to contract with a
third party to prepare all or a portion of the report. The report is to be
delivered within six months of the bill�s enactment.