On Wednesday, June 30, New Jersey Governor James McGreevey signed into law a $28 billion budget for the State’s new fiscal year that began on July 1.The new budget includes a 17% increase in spending and imposes new taxes and fees that will impact many New Jersey businesses, including auto retailers, as well as consumers. Millionaire’s Tax Unfortunately, the pocketbooks of many auto retailers and others closely-held business owners will be hit several times under the State’s new budget.The budget includes an income tax increase for those individuals who make $500,000 or more a year.This “Millionaire’s Tax” will rise by 41%—to 8.97% from a current 6.3%—and make New Jersey’s top income bracket one of the highest in the country.This increase is expected to raise $830 million that will be used to provide higher property tax rebates to those who earn less than $200,000 a year. Tax and Fee Increases The proposed budget also includes $1 billion in other tax and fee increases, including a $1.50 tax on new tire sales, including the tires on new vehicles.(See separate article on the State’s new tire tax.)The Governor’s budget is also committed to a number of other potential revenue sources that may impact auto retailers.The suspension of the net operating loss deductions, for the third year in a row, will cost New Jersey businesses an estimated $275 million and will negatively impact those auto retailers organized as “C” corporations. Coming Soon—A Four-Year Vehicle Registration on New Vehicles While not directly costing auto retailers money, the new budget will also require new car buyers and lessees to buy four-year registrations up front, in an effort to raise upwards of $90 million this budget year.As the party at the point of purchase, dealerships may feel the brunt of the customers’ shock when told they have to pay four times what they are used to paying to register their vehicle.Implementation of the new four-year registration will not begin until October 1, 2004.