New Jersey A 939: Provides gross income tax credits to support development of New Jersey-based small business start-ups.

Bill Text

(Sponsorship Updated As Of: 4/8/2024)
ASSEMBLY, No. 939

STATE OF NEW JERSEY
221st LEGISLATURE

PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION

Sponsored by:
Assemblyman ROY FREIMAN
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
Assemblyman CLINTON CALABRESE
District 36 (Bergen and Passaic)
Assemblywoman MITCHELLE DRULIS
District 16 (Hunterdon, Mercer, Middlesex and Somerset)

Co-Sponsored by:
Assemblywoman Reynolds-Jackson, Assemblyman Scharfenberger,
Assemblywomen Flynn and Haider

SYNOPSIS
Provides gross income tax credits to support development of New Jersey-
based small business start-ups.

CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.

A939 FREIMAN, CALABRESE
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AN ACT providing gross income tax credits to support the 1
development of New Jersey-based small business start-ups, 2
supplementing chapter 4 of Title 54A of the New Jersey Statutes. 3
4
BE IT ENACTED by the Senate and General Assembly of the State 5
of New Jersey: 6
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1. As used in sections 1 through 5 of P.L. , c. (C. ) 8
(pending before the Legislature as this bill): 9
“Employee” means an individual who is employed by, or 10
otherwise performs work or renders services for, a qualified small 11
business for consideration on a full-time, part-time, seasonal, or 12
other basis. “Employee” includes an employee who is obtained by a 13
qualified small business from a temporary employee agency, 14
professional employer organization, or employee leasing agency, 15
and, if a qualified small business is classified as a partnership for 16
federal income tax purposes, each partner of the partnership. 17
“Qualified small business” means a business that: 18
is registered to do business in this State, 19
maintains a business location or otherwise derives a majority of 20
its income from business activities or operations conducted within 21
this State, 22
has no more than 50 employees in any calendar month during the 23
first taxable year in which the business is conducted or operated for 24
a profit by the taxpayer, and 25
has net income of not more than $100,000 from all business 26
activities or operations conducted within and without this State 27
during the first taxable year in which the business is conducted or 28
operated for a profit by the taxpayer. 29
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2. a. A taxpayer that is a qualified small business shall be 31
allowed a credit against the tax imposed pursuant to the “New 32
Jersey Gross Income Tax Act,” N.J.S.54A:1-1 et seq., in an amount 33
equal to: 34
(1) 75 percent of the New Jersey gross income tax liability that 35
is incurred and required to be paid by the taxpayer in connection 36
with the conduct or operation of the qualified small business during 37
the first taxable year in which the qualified small business is 38
conducted or operated for a profit by the taxpayer, 39
(2) 50 percent of the New Jersey gross income tax liability that 40
is incurred and required to be paid by the taxpayer in connection 41
with the conduct or operation of the qualified small business during 42
the second taxable year in which the qualified small business is 43
conducted or operated for a profit by the taxpayer, and 44
(3) 25 percent of the New Jersey gross income liability that is 45
incurred and required to be paid by the taxpayer in connection with 46
the conduct or operation of the qualified small business during the 47

A939 FREIMAN, CALABRESE
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third taxable year in which the qualified small business is conducted 1
or operated for a profit by the taxpayer. 2
b. The amount of credit allowed pursuant to paragraph (1), (2), 3
or (3) of subsection a. of this section shall be taken by the taxpayer 4
to reduce the tax otherwise due and required to be paid for the 5
taxable year to which the credit applies. A credit allowed pursuant 6
to paragraph (1) of subsection a. of this section shall only be taken 7
by the taxpayer to reduce the tax otherwise due and required to be 8
paid for the first taxable year in which the qualified small business 9
is conducted or operated for a profit by the taxpayer. A credit 10
allowed pursuant to paragraph (2) of subsection a. of this section 11
shall only be taken by the taxpayer to reduce the tax otherwise due 12
and required to be paid for the second taxable year in which the 13
qualified small business is conducted or operated for a profit by the 14
taxpayer. A credit allowed pursuant to paragraph (3) of subsection 15
a. of this section shall only be taken by the taxpayer to reduce the 16
tax otherwise due and required to be paid for the third taxable year 17
in which the qualified small business is conducted or operated for a 18
profit by the taxpayer. 19
c. The priority in which a credit allowed pursuant to paragraph 20
(1), (2), or (3) of subsection a. of this section and any other credits 21
or deductions or adjustments that are allowed by law shall be taken 22
shall be prescribed by the director. 23
d. A qualified small business that is classified as a partners