NJ Republican Wants State To Trim These 2 Taxes: Here’s Why

ESSEX COUNTY, NJ — A Republican assemblyman is calling for his peers in Trenton to trim New Jersey’s sales and corporate transit taxes, pointing to recent campaign pledges from Democrats to make the state more affordable.

Assemblyman Christopher DePhillips (NJ-40) has introduced two bills that aim to reduce taxes in New Jersey.

The first bill, A-6006, would cut the state’s sales and use tax from 6.625 percent to 6 percent. It would take effect Jan. 1 if passed and signed into law.

According to DePhillips, sales tax is the largest source of revenue for the New Jersey budget’s general fund, producing more than $14 billion a year.

DePhillips said 45 states collect a statewide sales tax at an average rate of 7.5 percent. Pennsylvania has a rate of 6.34 percent, Maryland’s is 6 percent, Connecticut’s is 6.35 percent, and Delaware does not impose a statewide sales tax.

“Local economies would get a boost and we would become more competitive if the sales tax was lowered,” DePhillips said. “The costs of energy, car repairs, food and life’s other unavoidable expenses will go down.”

“The Murphy administration has raised taxes by $21 billion and a dozen tax increases were just passed by Trenton Democrats to fund our state budget,” he added. “It’s time to test their election-year talking points on affordability by pressuring them to slash the sales tax to help struggling families.”

• See Related: Murphy Signs Record Budget—With New Taxes And Tax Relief—Into Law
• See Related: How New Jersey Lawmakers Voted On State Budget: Senate, Assembly

DePhillips was recently re-elected to his Assembly seat in the 40th district. The district includes the following municipalities in Bergen, Essex and Passaic counties: Caldwell, Cedar Grove, Essex Fells, Fairfield (Essex), Franklin Lakes, Hawthorne, Little Falls, North Caldwell, Ridgewood, Totowa, Verona, Wayne, West Caldwell, Woodland Park, Wyckoff.

• See Related: NJ Republicans Dig In For ‘Long Haul’ After 2025 Election

CORPORATE TRANSIT TAX

DePhillips is also calling for an end to a “corporate transit fee” that was approved in New Jersey last year.

Business that that earn more than $10 million per year are subject to an extra 2.5 percent surcharge, in addition to other taxes.

Supporters of the new surcharge said that only the largest corporations in the state are impacted, many of which don’t even have a headquarters in New Jersey. But critics argued that the tax will lead to job losses if big businesses decide to pack up their bags and leave.

• Read More: Tax Corporations, Fund Trains: Shoving Match Intensifies In New Jersey

The new tax – which expires in 2029 – is intended to help NJ Transit balance its budget. Officials estimated that the surcharge will create a regular funding source of roughly $1 billion per year for the cash-strapped transportation agency, which recently hiked its fairs for bus and train riders.

NJ Transit’s 2026 budget includes $789 million in revenue from the new corporate transit fee.

• See Related: New Business Tax Will Raise $789M For NJ Transit, Latest Budget Shows

DePhillips has introduced a bill that would rescind the 2.5 percent surcharge, which he said is currently being applied to around 600 businesses in the state.

“NJ Transit does not need more money from businesses or riders who have little or no control over its budget, operations, and service levels,” the assemblyman argued. “What the agency needs in 2026 is a comprehensive audit, a restructuring of operations, and a decade-focused strategy to transform the transportation system.”

Supporters of the corporate surcharge tax have countered that the “highly targeted tax” is focused on multinational companies like Amazon and Walmart – not small businesses and mom and pop shops.

“These are the same giant corporations that benefited from the Trump tax cuts, and they’ve been raising prices on consumers and soaking up record profits ever since,” said Eric Benson, a campaign director with For The Many NJ.

“There’s no reason to think that the corporate transit fee will hurt businesses, especially since these same companies saw their profits skyrocket while the corporate surcharge was in effect,” Benson argued last year.

A recent Fairleigh Dickinson poll found that 54 percent of New Jersey residents support restoring a corporate tax surcharge and dedicating the revenues to NJ Transit. About 29 percent of respondents said they would not support it.

• See Related: Corporate Taxes And Public Transportation: Debate Rages In New Jersey
• See Related: Raise Or Lower Business Taxes In NJ? Experts Disagree Amid 2025 Election

Send local news tips and correction requests to eric.kiefer@patch.com. Learn more about advertising on Patch here. Find out how to post announcements or events to your local Patch site.