This bill aims to provide individual taxpayers in New Jersey with a deduction from their gross income for capital gains derived from the sale or exchange of qualified small business stock (QSBS) that has been held for over five years. The maximum deduction available is determined by the percentage of the corporation's payroll that is attributable to employment within the state. Taxpayers can deduct up to $10 million or ten times the adjusted basis of the stock sold if at least 80% of the payroll is in New Jersey. If the threshold is not met, the deduction is limited to $8 million or eight times the adjusted basis. The bill also defines what constitutes qualified small business stock and outlines the conditions under which these deductions apply.

Furthermore, the bill specifies criteria for a corporation to qualify as a small business, including asset limits and employee counts, while excluding certain industries such as health, law, and finance from this capital gains treatment. It mandates that corporations issuing QSBS report to the Director of the Division of Taxation, who is authorized to create regulations for enforcement. The act is designed to take effect immediately and will apply to taxable years beginning after its enactment.