Legislative budget committees on Thursday released bills strongly supported by NJBIA that would utilize tax incentives to boost investment in manufacturing and make New Jersey more competitive for small businesses in the innovation sector.
The first bill, S-4503, sponsored by Senators Paul Sarlo (D-36) and Raj Mukherji (D-32), allows a deduction from the New Jersey gross income of certain capital gains from the sale or exchange of New Jersey qualified small business stock (QSBS) held for more than five years.
NJBIA Chief Government Affairs Officer Christopher Emigholz said the bill would level the playing field for the tax treatment of investments in startups. New Jersey is currently one of only five states that does not conform to federal QSBS tax standards, meaning investors in the Garden State are taxed on QSBS gains at the full state income tax rate, he said.
“Ending our uncompetitive and outlier tax treatment of investments in innovative startups is one of the best ways to attract capital to grow jobs, our economy and our tax revenues,” Emigholz said.
The Senate Budget & Appropriations Committee voted to release the S-4503. The Assembly Budget Committee on Thursday released an identical version, A-4455, sponsored by Assemblymen Roy Freiman (D-16), Gary Schaer (D-36) and Robert Karabinchak (D-18).
The Senate Budget & Appropriations Committee also advanced a second bill, S-4407, sponsored by Senators Michael Testa (R-1) and Linda Greenstein (D-14), that would establish the “Next New Jersey Manufacturing Program” to incentivize in-state manufacturing investments and job creation.
The legislation would use $500 million from the existing Aspire and Emerge tax credit programs, under the direction of the New Jersey Economic Development Authority, to provide tax credits to eligible manufacturing businesses.
Last week, the Assembly Appropriations Committee advanced an identical version of the bill, A-5687 sponsored by Majority Leader Louis Greenwald (D-6), and Assembly members Antwan McClellan (R-1) and Verlina Reynolds-Jackson (D-15).
“We are pleased to support these bills and to see such overwhelming support for them from our lawmakers,” Emigholz said. “We will continue to urge their passage to the governor’s desk.
