Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Business Tax Policy topic
No spam. Unsubscribe anytime.
Committee releases A4455 to align New Jersey capital-gains treatment for qualified small business stock with federal rules
Summary
A4455, as amended, would allow deductions from New Jersey gross income for certain capital gains from qualified small business stock held more than five years; the committee amended calculation rules and released the bill after testimony from business groups and investors urging parity with other states.
The Assembly Appropriations, State and Local Committee released A4455 (first reprint), which would allow deductions from New Jersey gross income for certain capital gains from the sale or exchange of New Jersey qualified small business stock held for more than five years and would revise how the maximum allowable deduction is calculated.
The committee adopted amendments that change the calculation of the maximum allowable deduction and adjusted the definition of "qualified small business" by removing a minimum ownership percentage requirement. Supporters said the measure brings New Jersey into alignment with federal Qualified Small Business Stock (QSBS) rules used by most other states and would make the state more competitive for startups and investment.
Chris Hemmingholtz, head of government affairs for the New Jersey Business & Industry Association (NJBIA), told the committee, "On behalf of our thousands of members around the state, we strongly support A4455... it's an investment in future job growth and also future revenue growth for our state." He said the measure helps reduce risk for entrepreneurs and investors and was included in the governor's budget proposal.
Sam Toole, partner at Primary Venture Partners and a board member of TechUnited New Jersey, told the committee the tax treatment affects where founders incorporate and scale companies. He testified that 45 other states conform to the federal QSBS framework and that New Jersey's divergence has contributed to lower venture capital investment and fewer venture-backed companies compared with neighboring New York.
Several organizations were recorded as supporting the bill, including the New Jersey Business & Industry Association, the New Jersey State Chamber of Commerce, the Chamber of Commerce of Southern New Jersey, and TechUnited. No members of the public registered opposition at the committee hearing.
The committee recorded affirmative roll-call responses from members and released the bill as amended. The measure will proceed to the next legislative step for further consideration.
