TRENTON — Concerned over the possible appearance of bias, the Department of Treasury has withdrawn its support for a rule that would have granted the state’s top tax collector the power to waive or relax sections of the tax code if a business proved a hardship. The move comes a day before the Senate Budget Committee was scheduled to...
New Jersey state treasurer Andrew Sidamon-Eristoff speaks at a luncheon during the New Jersey State League of Municipalities annual conference in Atlantic City, in this Nov. 17, 2010 photo.TRENTON — Concerned over the possible appearance of bias, the Department of Treasury has withdrawn its support for a rule that would have granted the state’s top tax collector the power to waive or relax sections of the tax code if a business proved a hardship.
The move comes a day before the Senate Budget Committee was scheduled to hold a hearing on the new rule, which critics say was too broad and could lead to an uneven playing field.
The person who would have been granted the waiver power under the new rule, Michael Bryan, acting director of the state Division of Taxation, was invited to testify before the committee, but said in a letter today that his appearance was no longer necessary.
"While not the intent of the proposed rule, upon further review we believe that the rule threatens to raise an appearance that tax collection would not be conducted in a fair and impartial manner," Bryan wrote in a letter to Sen. Paul Sarlo (D-Bergen), the budget committee chairman. "This was never the intent of the proposed rule. Accordingly, to foreclose even the appearance of such an outcome, the Division has withdrawn the rule."
In response, Sarlo said, "It was an ill-fated rule change that flies in the face of transparency. Once they realized they had to defend it, they dropped it."
State Treasurer Andrew P. Sidamon-Eristoff did not review the rule before it was published and finds it unnecessary, his spokesman, Andy Pratt, said. The Treasurer has since changed internal procedures to ensure he reviews every rule proposed by his department, Pratt said.
Short on specifics, the rule would have allowed businesses to request waivers from any levy or requirement that falls under the portion of the state code that regulates how business taxes and a host of other fees are collected.
It is not uncommon for states and the federal government to provide regulatory relief to businesses, particularly when new or existing laws create costs. However, those relief measures are often associated with environmental and financial regulations, not the tax code.
Administration officials initially defended the rule, including Christie spokesman Michael Drewniak, who said, "What good is a bankrupted company at generating revenue or employee payroll taxes?"
Drewniak did not respond to requests for comment today.
Previous coverage:
• Gov. Christie pushes tax waiver for N.J. businesses in financial hardship
• Gov. Christie to launch campaign encouraging Illinois businesses to relocate to N.J.
• Business tax cut to be included in Gov. Christie's budget this year
• N.J. Assembly passes bill that could give companies major tax break
• N.J. Senate panel approves tax breaks for historic building rehabilitations, limos, movie studios
• Gov. Chris Christie may propose business, income tax cuts by next month