This is a status report provided by the New Jersey State Bar Association on recently passed and pending legislation, regulations, gubernatorial nominations and/or appointments of interest to lawyers, as well as the involvement of the NJSBA as amicus in appellate court matters. To learn more, visit njsba.com.
NJSBA’s President-Elect, Keefe, Named To Murphy Transition Team
Governor-Elect Phil Murphy named New Jersey State Bar Association President-Elect John E. Keefe Jr. to his transition team. Keefe was one of several NJSBA members to join the team of leaders who will guide policy in the new administration. Keefe is a part of a law and justice transition committee.
The NJSBA met with Murphy during the campaign season to discuss the association’s goal in achieving an independent, impartial and diverse judiciary and preserving the Hughes Compact, which Governor Richard J. Hughes began to have the association vet candidates for judicial and prosecutorial candidates. Since 1969, the NJSBA has had the only nonpartisan role in this process.
A number of other members appear on Murphy’s transition team, including judges, attorneys, and legal scholars.
Trump Federal Tax Proposal Draws Concerns about Tax Treatment of Professionals; Alimony
NJSBA President Robert B. Hille called on the New Jersey delegation to oppose the inequity of President Donald Trump’s federal tax proposal that would tax 100 percent of earnings from professional services. The proposal would unfairly tax as personal income those services provided by professionals, such as attorneys and accountants, unfairly taxing them at a higher rate than their business-owner counterparts, the association wrote.
Proponents of the new tax proposal tout the preferred tax cap of 25 percent, which is applicable to pass-through companies such as LLCs, partnerships, sole proprietorships, and S-corporations. Professional service firms, such as lawyers, accountants and medical professionals, are exempt from the cap. Professionals organized as a pass-through entity would continue to be taxed as personal income and be subject to a federal tax rate of up to 39.6 percent.
Hille said there is no federal historic federal individual income tax policy reason necessitating the distinction between professional service businesses and other businesses. “The NJSBA urges you to work to address this inequity in the final version of the bill and advocate, instead, for a reduced pass-through tax rate that is applied evenly to all pass-through entities, without singling out any one type of entity for differing treatment,” Hille said in the letter.
Another Trump proposal calls for the end of the alimony tax deduction currently available to divorced spouses. The tax deduction is often seen as a bargaining tool for family law attorneys who use it as an incentive to the paying spouse. Hille wrote that the repeal will have a particularly detrimental effect on those couples who are in the middle and lower income tax brackets with limited financial resources, and will keep higher income taxpayers in the higher tax brackets despite having to pay out a portion of their income to preserve the financial security of their previous spouse.
“Overall, the elimination of the alimony deduction will mean less income is available for families already adversely affected by the trauma of divorce,” according to the association’s letter. “It could also mean lengthier and more contentious divorce negotiations.”
The plan has cleared the Senate Finance Committee and is expected to be voted on by the full Senate shortly.
State Senate Advances Several Bills in First Lame Duck Quorum
New Jersey’s Senate committees met to advance several bills signaling the beginning of a busy lame duck session. Among those bills advanced were:
- S2747 (Weinberg)/A4245 (Johnson) requiring all employers to provide each employee with a statement of earnings, including information regarding the employee’s wage calculation was reported out of the Senate Labor Committee with amendments. The bill awaits a full vote in both houses. The association has not taken a position on this bill, but is monitoring its progress.
- S3162 (Vitale)/A4468 (Schaer) expanding the Early Intervention Support Services Programs currently available in 11 counties to provide for one program in each county advanced out of the Senate Budget and Appropriations Committee with amendments. The bill passed the Assembly and awaits a full vote in the Senate.
The association took no position on this bill, but is monitoring its progress. If passed, the bill would provide rapid access to short term, recovery-oriented crisis intervention and crisis stabilization services for up to 30 days to an individual 21 years of age or older with a serious mental illness and includes, but is not limited to, medication, therapy, and case management services, which are offered to an on-site location, other than a hospital, or through outreach in the community.
- S2839 (Diegnan)/A4562 (Caride) clarifying ownership requirements for certain homes and seasonal rentals exempt from bulk sale notification requirements advanced out of the Senate Budget and Appropriations Committee. The association is monitoring this bill.
Supreme Court Committee Candidates Sought
The Supreme Court is seeking attorneys, judges and law professors interested in being considered for possible committee appointment to advise the Court in several areas of interest to help foster participation of the bench and bar and increase diversity in those committees. The appointments for consideration are for the 2018-2020 term (Sept. 1, 2018 through Aug. 31, 2020) for the following committees:
- Arbitration Advisory Committee
- Civil Practice Committee
- Committee on Jury Selection in Civil and Criminal Trials
- Committee on Model Civil Jury Charges
- Special Civil Part Practice Committee
- Committee on the Tax Court
- Committee on Women in the Courts
Those interested in being considered for these committees or for any other committee should indicate that committee by submitting an application at the following website: jusiciary.state.nj.us/sccms/onlinemembership.
The application should include: full name; address; email address; telephone number; attorney ID (if applicable); the county or counties in which you practice (for attorneys); and selecting from the menu the name(s) of the committee(s) in which you are interested. Attorneys and law professors should include a resume with the application.