This bill amends N.J.S.54A:3-1 to index the veterans income tax exemption for inflation, which is currently set at $6,000. Starting in tax year 2023, the exemption amount will be adjusted annually in direct proportion to the percentage change in the Chained Consumer Price Index for all Urban Consumers (C-CPI-U) for the 12-month period ending August 31 of the preceding tax year. If there is no increase in the C-CPI-U, the exemption amount will remain unchanged for that tax year.

The bill aims to ensure that the veterans' tax exemption keeps pace with inflation, thereby maintaining its value over time. This adjustment mechanism aligns with practices used by the federal government for adjusting income tax brackets, ensuring that veterans receive a fair and consistent benefit as economic conditions change.