A GREEN MOUNTAIN MIRACLE AND THE GARDEN STATE GRAB: LESSONS FROM VERMONT AND NEW JERSEY ON STATE CORPORATE TAX REFORM

The recent efforts of two states, New Jersey and Vermont, to take up the challenge of corporate tax reform are particularly instructive. These two states were operating under different circumstances and ultimately took two very different approaches to fixing their corporate tax systems. In 2002, New...

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Bibliographic Details
Published in:The Tax lawyer 2007-01, Vol.60 (2), p.351-414
Main Authors: Cowan, Mark J., Kakstys, Clint
Format: Article
Language:English
Subjects:
Changes
Comparative analysis
Corporate income taxes
Corporate taxes
Corporations
Financial reporting
Income taxes
Sales taxes
State income tax
State laws
Statutory law
Studies
Tax reform
Tax regulations
Taxation
Taxpaying
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Summary:The recent efforts of two states, New Jersey and Vermont, to take up the challenge of corporate tax reform are particularly instructive. These two states were operating under different circumstances and ultimately took two very different approaches to fixing their corporate tax systems. In 2002, New Jersey, facing a significant fiscal crisis, used a complex mixture of traditional and groundbreaking techniques to expand the reach of its corporate tax system. In 2004, Vermont, in an attempt to more equitably distribute its corporate tax burden, became the first state in over 20 years to enact a mandatory combined reporting law. The purpose of this Article is to analyze the 2002 New Jersey and 2004 Vermont tax reforms to determine if they can provide any guidance to other states hoping to repair their own corporate tax systems. The paper concludes that the mechanics of New Jersey's 2002 corporate tax changes, while falling short of true reform, can nonetheless provide some guidance to states in fiscal distress that lack the political will to enact combined reporting.
ISSN:0040-005X
2329-6089