Small business owners in New Jersey have something to celebrate. On June 30th, New Jersey's tax on S corporations is set to expire. The administration has announced that it has no plans to renew the tax. A fact that has made over 107,000 small businesses extremely happy.
Generally, S corporations pay no corporate income taxes on its profits. Instead, the shareholders pay income taxes on their proportionate shares of the corporation's profits. However, New Jersey had been taxing both shareholder and corporate income. Many advocates who have pushed for the tax's elimination for the last 13 years saw it as an unfair situation of double taxation.