- NJ accountants are advising clients to leave the state over high living costs, a survey shows.
- The NJ Society of Certified Public Accountants said businesses were also concerned about high taxes.
- People have fled high-tax states like New York, New Jersey, and California during the pandemic.
- See more stories on Insider’s business page.
Accountants in New Jersey are advising clients to leave the state because of its high living costs and corporate and property tax rates.
Seventy per cent of certified public accountants (CPAs) have advised individual clients to leave the state because of the high cost of living, according to a survey by the New Jersey Society of CPAs (NJCPA).
And 53% of respondents said they had advised New Jersey-based business clients to consider relocation because of the state’s higher cost of doing business.
Read more: I’m a millionaire. Biden’s plan to raise my taxes is a great idea.
New Jersey’s high property-tax and corporate-tax rates, lack of available skilled personnel, and regulatory requirements were top concerns for businesses, the CPAs said.
“The tax structure here is one of the highest in the country, if not the highest, and that certainly is a negative issue for individuals and for businesses,” NJCPA’s CEO, Ralph Thomas, told CNBC, who first reported on the survey.
New Jersey has the highest top corporate-tax rate at 10.5%, the highest average property-tax rate, and the worst business tax climate in the US, according to the Tax Foundation.
And New Jersey residents spend on average 12.2% of their income on state and local taxes, the Foundation said — the third-highest in the US.
Thomas told CNBC that many of the people and businesses leaving New Jersey were choosing states with lower taxes and living costs, including Delaware, Pennsylvania, Florida, North Carolina, South Carolina, Tennessee, and Texas.
“Tax hell” in New York and New Jersey has triggered mass migration to Florida, according to the Sunshine state’s CFO, who called the two Northeast states “financial train wrecks.”
But people fleeing high-tax states like New York, New Jersey, and California during the pandemic need to watch out for other surprise taxes, a tax advisor told Insider.
In the New Jersey survey, the CPAs were more optimistic about the national economic recovery from the pandemic than New Jersey’s.
Thirty-six per cent of CPAs said they thought the state’s economy would get worse for the rest of 2021 compared with the first five months, while 30% thought the national economy would get worse. And 35% said they thought New Jersey’s economic condition would improve, compared to 43% for the country.
The CPAs said state legislature should avoid excessive regulations and invest in infrastructure to retain businesses.
Source: Business Insider