Failure to fix tax code could devastate state’s economy

For the last two years, New Jersey has been one of three states to discourage job growth by suspending the Net Operating Loss (NOL) provision within the state’s tax code. Now, the state is threatening to renege to reinstate the NOL provision, seeking another suspension.

This could have a devastating impact on the state’s economy. If the suspension continues, the garden state will be the only state not to offer job providers NOL access.

New companies, high-tech startups, or established companies introducing new lines, usually experience losses before their ventures prove profitable.

The NOL provision allows businesses to stay afloat, creating jobs and improving the economy.

Suspension of the NOL disproportionately hurts small businesses that depend on the provision in their critical early years.

As a result, many of them will have to think twice before hiring or expanding, and others may go out of business altogether.

Entrepreneurs may refrain from starting their businesses here and instead bring their ideas to states that encourage innovation and risk taking.

By suspending the NOL, we may be forcing tomorrow’s Microsoft or Starbucks to create jobs and ratables elsewhere.

When the NOL suspension was originally proposed, business people were assured it would only be for two years. Legislators need to remember there’s honor in promises kept, dishonor in promises broken.

Joan Verplanck

president, New Jersey

Chamber of Commerce

Trenton