July 2004. In a new law approved on June 28, 2004, New Jersey increased its top income tax rate for tax years beginning on and after January 1, 2004, from 6.37% on the portion of taxable income above $75,000 for single individuals and $150,000 for married couples to 8.97% on the portion of taxable income above $500,000 regardless of filing status. This represents a significant shift in the traditional relationship between the top income tax rates in New York and New Jersey. For the first time in history, the top New Jersey rates are now substantially higher than the top New York rates. New York State’s temporary top rate of 7.7% on taxpayers with taxable incomes of $500,000 or more is schedule expired on December 31, 2005. New York’s current top income tax rate is 6.85% for married taxpayers with taxable incomes above $40,000 and single taxpayers with incomes above $20,000. The 6.85% top rate is more than 55% lower than the state’s top income tax rate in 1974.

• Chapter 40 of the Laws of 2004 of the State of New Jersey