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New Jersey: Gov. Christie terminates reciprocal agreement with Pennsylvania

Barely a month ago, we described the PA/NJ Reciprocal Income Tax Agreement (Agreement), pursuant to which employers in Pennsylvania and New Jersey were excused from withholding income tax from employees who live in one state but work in the other. In February, Gov. Christie ordered the state’s Treasurer and Acting Attorney General to determine what it would take to withdraw from the Agreement, and now has actually done so.
It is no secret that the Garden State has fallen on hard times and needs the revenue, despite already collecting a significant amount of tax revenue. For instance, its property taxes are among the highest in the country, it levies both an inheritance tax and an estate tax, and it maintains some of the worst-structured individual income taxes in the country, all reasons that the Tax Foundation gave for ranking New Jersey dead last in its 2016 State Business Tax Climate Index.