Bill
S 4219
New Jersey municipalities can more effectively administer local employer payroll taxes by requiring enhanced employer reporting, enabling targeted state data sharing to verify repo
Note on document inconsistency
- The bill header you provided (S 4219 — "Establishes the New York Muslim American Advisory Council") does not match the legislative text included, which is a New Jersey measure amending the state/local employer payroll tax law (P.L.1970, c.326 and related tax disclosure provisions). This summary is based on the bill text and committee/floor statements you supplied (New Jersey employer payroll tax changes).
Summary — purpose and intent
- The bill amends New Jersey’s Local Tax Authorization Act to strengthen administration and enforcement of municipal employer payroll taxes. It (1) requires additional employer reporting as requested by municipalities, (2) authorizes targeted State tax data disclosure to municipalities that administer an employer payroll tax to verify reports and identify non‑reporting employers, (3) clarifies relief where an out‑of‑state entity imposes a payroll tax on an employee, and (4) permits municipalities to retain a small percentage of collections to cover administration costs. Certain municipalities with higher median household incomes must direct revenues to school trust funds under existing rules (retained/clarified).
Key provisions and changes
- Employer reporting: Municipal ordinances may require employers to report payroll for each preceding calendar quarter and provide additional information as requested to assist tax administration.
- Reporting/payment schedule and penalties: Quarter reporting due on last day of April, July, October, and January; municipalities may impose penalties and specified interest on delinquencies (8% on first $1,500; 18% above).
- State tax data disclosure: The Director of the Division of Taxation may furnish wage and withholding information or other necessary State tax return information to municipalities that administer an employer payroll tax for verifying employer reports and identifying employers operating in the municipality but not reporting.
- Administrative retention: A municipality may elect to retain up to 3% of employer payroll tax collected annually to pay for administration costs.
- Double taxation relief and documentation: Employers are not required to pay the payroll tax to more than one municipality for the same employee remuneration. If an out‑of‑state municipality or entity imposes a payroll tax on a New Jersey resident employee for services performed out‑of‑state, the NJ municipal payroll tax will not apply — provided the employer submits prescribed documentation (residency, service location/description, and applicable out‑of‑state tax) to the taxing municipality.
- Revenue use (existing/clarified): Municipalities with median household income ≥ $55,000 (ACS 5‑year estimate) that adopt an employer payroll tax must deposit revenues into a trust fund to be used exclusively for school purposes, with monthly transfers to the local school district calculated per statutory formula (difference in State school aid vs. SFY2018).
Who is affected
- Municipalities that adopt or administer an employer payroll tax (currently only Newark and Jersey City have such ordinances, but the law applies to any qualifying municipality).
- Employers with employees who perform services within those municipalities (additional reporting obligations; potential documentation requirements for out‑of‑state service taxation).
- School districts in municipalities subject to the trust‑fund revenue rule (higher‑income municipalities as defined).
- State Division of Taxation (new data disclosure/coordination functions) and Division of Local Government Services (prescribed documentation/processes).
Procedural and timeline aspects
- Introduced: March 3, 2025.
- Committee: Reported out of Senate State Government, Wagering, Tourism & Historic Preservation Committee with amendments (May 29, 2025).
- Senate amendment/voice vote recorded June 30, 2025.
- Status entries show referral to Finance (Feb 3, 2025 appears duplicated), and latest status lists REFERRED TO FINANCE.
- Effective date: the bill text states it would take effect immediately upon enactment.
Potential impacts and considerations
- Improves municipal ability to identify non‑compliant employers and verify payroll tax liabilities by accessing State wage/withholding data (raises operational and privacy/confidentiality considerations — the bill retains confidentiality safeguards but expands permitted disclosure).
- Lowers administrative burden on municipalities by allowing retention of up to 3% of collections to pay administrative costs.
- Clarifies protection against double taxation when an out‑of‑state payroll tax applies, but requires employer documentation to secure exemption.
- May increase compliance costs for employers (additional reporting, documentation) and could affect municipal revenues and school funding where trust‑fund rules apply.
Sponsors and related measures
- Primary sponsor: Kevin S. Parker. Co‑sponsors include Luis R. Sepúlveda, Robert Jackson, Julia Salazar, James Skoufis, Cordell Cleare, Anthony H. Palumbo, Joseph P. Addabbo Jr.
- Companion/related bills: A5371 (companion); multiple prior‑session bills listed (S2620, S1628, etc.).
Compiled from official sources — confirm details with the bill’s official record.
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