The bill amends Section 4 of P.L.1945, c.162 (C.54:10A-4) to provide tax relief for small businesses in New Jersey by allowing them to exclude up to $50,000 of income from taxation under both the corporation business tax and the gross income tax. A "qualified small business" is defined as an independently owned entity with specific criteria, including a management ownership of at least 51%, gross revenues not exceeding $2 million, and a workforce of no more than 20 employees, primarily state residents. This exclusion is set to take effect for tax periods beginning after December 31, 2024, aiming to alleviate financial pressures on small businesses and promote economic growth.

Additionally, the bill introduces various amendments to existing tax definitions and provisions, particularly concerning S corporations. It specifies that for taxable years starting after December 31, 2024, the S corporation income of a qualified small business will not include the first $50,000 of income calculated under relevant tax provisions. The bill also includes deletions of outdated legal language and provisions that are no longer applicable, streamlining the tax process for small businesses and ensuring compliance with current regulations. Overall, the bill seeks to clarify tax treatment and provide necessary support to small businesses in New Jersey.

Statutes affected:
Introduced: 54:10A-4, 54A:5-10