This bill aims to provide tax deductions for individual taxpayers in New Jersey on capital gains from the sale or exchange of qualified small business stock (QSBS) held for over five years. The maximum deduction is determined by the percentage of the corporation's payroll that is attributable to employment within the state. Taxpayers can claim a deduction of either $10 million or 10 times the adjusted basis of the stock if at least 80% of the payroll is in New Jersey, or $8 million or eight times the adjusted basis for those with less than 80%. The bill also defines what constitutes qualified small business stock and outlines the conditions under which the deduction can be claimed.

Furthermore, the legislation includes provisions for married individuals filing separately and jointly, detailing how deductions and gains should be allocated between spouses. It establishes 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. Corporations issuing QSBS are required to report to the Director of the Division of Taxation, who is empowered to create regulations for enforcement. The act is set to take effect immediately and will apply to taxable years beginning after its enactment.