Virus Outbreak New Jersey

The New York skyline is seen May 11, 2020, from Jersey City, New Jersey.

(The Center Square) – A Republican lawmaker says New Jersey Gov. Phil Murphy needs to “stop rolling over” as New York state tax officials step up enforcement to collect income tax payments from New Jersey residents.

But the governor’s office says the state has already taken action and that the U.S. Supreme Court needs to weigh in on the matter.

According to The Wall Street Journal, tax officials in New York state are auditing New Jersey residents’ tax returns. Empire State officials argue New Jersey residents who usually worked in New York before the COVID-19 pandemic but are now working remotely still need to pay New York income taxes.

“It’s shocking to watch as Governor Murphy continues to sit silent while a horde of tax officials in Albany are issuing billions of dollars of tax bills to New Jersey residents for income earned here in the Garden State during the pandemic,” state Sen. Steven Oroho, the Senate Republican budget officer, said in a news release.

“The ‘convenience of the employer’ rule that New York is using to stake its claim clearly shouldn’t apply if offices were closed due to the pandemic and workers had no choice but to work from home in New Jersey,” Oroho, R-Morris/Sussex/Warren, added. “If there ever was a time to fight back against New York’s unfair taxation of New Jerseyans, it’s now.”

Oroho said he successfully urged the state to file an amicus brief in a similar tax case involving Massachusetts and New Hampshire. In addition, he recently teamed with U.S. Rep. Josh Gottheimer, D-N.J., to send a letter to Treasury Secretary Janet Yellen and Internal Revenue Service Commissioner Charles Rettig asking for federal guidance.

He contends New Jerseyans working from home and no longer commuting to the Big Apple could reduce their tax bills by more than half by paying income taxes to New Jersey rather than New York. Additional tax revenue in the Garden State could support expanding the Homestead Benefit, Senior Freeze and additional revenues for schools to help reduce property tax bills, Oroho contends.

In October, the state Senate unanimously passed S-3064, which would require the state treasurer to review New York’s taxation of New Jersey residents. Oroho sponsored the bill with state Senate Budget Chairman Paul Sarlo, D-Bergen/Passaic.

“If Senator Oroho is in fact ‘leading the charge’ on this issue, then he should know that in December Attorney General Grewal filed an amicus brief in support of New Hampshire, which is suing Massachusetts on this issue,” Darryl Isherwood, a spokesman for Murphy, said in an email. “Fair taxation will be decided in the Supreme Court, not through posturing by Senator Oroho, who can hardly claim to be a champion for New Jersey taxpayers after supporting President Trump and his four-year assault on the middle class and voting against a middle-class tax rebate here in New Jersey.

“Our position is very clear: Another state taxing those residents who previously commuted to their jobs, but have worked from home throughout the pandemic, is unfair and should be stopped,” Isherwood added. “We look forward to a decision from the court.”