This bill proposes a tax deduction for New Jersey taxpayers on capital gains realized from the sale or exchange of qualified small business stock (QSBS) held for more than five years. The maximum deduction available is contingent upon the percentage of the corporation's payroll attributable to employment within New Jersey, with higher deductions of either $10 million or 10 times the aggregate adjusted basis of the QSBS for businesses with at least 80% of their payroll in-state. If this threshold is not met, the maximum deduction is set at $8 million or 8 times the adjusted basis. The bill specifies that QSBS must be originally issued by a C corporation after January 1, 2015, and acquired directly by the taxpayer.

To qualify for the capital gains treatment, taxpayers must hold the QSBS for a minimum of five years, and the issuing corporation must meet certain criteria, including having gross assets not exceeding $50 million and fewer than 225 employees. The bill excludes capital gains from specific service-related businesses and mandates that a significant portion of the corporation's assets be utilized in active business operations. Additionally, corporations issuing QSBS are required to submit reports to the Director of the Division of Taxation, who is empowered to establish regulations to enforce the act's provisions.