The office of Gov. Phil Murphy, a Democrat, announced Tuesday night that Murphy signed the COVID-19 Fiscal Mitigation Act, S.B. 2338. The announcement came hours before the traditional April 15 tax deadline. The measure also pushes back the state fiscal year and requires a new budget proposal by the governor.
The bill was part of a package of legislation introduced late last week by lawmakers to help mitigate the effects of the outbreak of the the novel coronavirus, which causes COVID-19, a respiratory disease. Murphy promised on Monday he would sign the bill, arguing that pushing this deadline into the summer would give taxpayers more time to try to get back into a better financial position.
The state Senate on Monday morning unanimously passed the bill, sponsored by Deputy Majority Leader Paul Sarlo, D-Wood-Ridge, and Sen. Steven V. Oroho, R-Sparta. The Assembly unanimously passed the bill on Monday afternoon after it was substituted for an Assembly version, A.B. 3918. That bill was sponsored by Assembly Members Eliana Pintor Marin, D-Newark, Harold Wirths, R-Hardyston, and John Burzichelli, D-Paulsboro.
The law automatically extends the payment and filing deadline for gross income tax or corporation business tax from April 15 to July 15, matching federal deadlines. It also changes the timing for the payment of interest, penalties and assessment of tax, according to a bill summary.
The measure will require a new budget proposal from the governor by Aug. 25, and it extends the quarterly payment due this week to July 15, though the second quarterly payment will still be due on June 15.
It also changes the duration of the state's 2020 fiscal year to end on Sept. 30 instead of June 30, and sets Oct. 1, 2020, as the start of the 2021 fiscal year.
In a statement Tuesday, Sarlo, who chairs the Senate Budget and Appropriations Committee, said the pandemic is causing financial stress for families and fiscal issues for the state.
"We don't yet know the full dimensions of the financial consequences for residents, businesses and the state, but there is no doubt that we all face some hard times," Sarlo said. "The extensions will give taxpayers more time to calculate and manage their finances, and will provide state officials a workable timetable to craft a budget that addresses our critical needs."
Oroho, in a statement, said the new law comes as individuals, businesses and government are all struggling to figure out the effects of the pandemic and the measures taken to stop its spread.
"This law will provide taxpayers a much-needed pause and give the state additional time and data to rework the upcoming budget to meet emergent needs within the confines of a rapidly changing revenue situation," Oroho said.
Besides changing the duration of the state's 2020 and 2021 fiscal years, the law requires the state treasurer to provide updates on economic conditions, revenue and spending plans. The governor is required to present a revised budget message for the 2021 fiscal year.
The law had won support from the New Jersey Chamber of Commerce but faced criticism from the New Jersey Society of Certified Public Accountants. That group said the law failed to grant extensions for all filing and payment deadlines, as the group recommended, making things difficult for taxpayers and advisers who must operate under different deadlines for federal and state filings.
The bills moved forward Monday as the status of A.B. 3841, a bill that would have extended the state's tax filing and payment deadlines to June 30, remained unresolved. The state Legislature unanimously passed the bill in March, but Murphy had not acted on it as of Tuesday. Soon after its passage, Murphy and legislative leaders agreed on pushing the deadlines back to July, which could make the bill moot.
--Editing by Robert Rudinger.
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