This bill amends New Jersey's gross income tax law to include annual inflation indexing for taxable income brackets. The new provisions require the Director of the Division of Taxation to recompute the taxable income bracket amounts and corresponding tax amounts each year based on the cost-of-living adjustment, which is defined as the change in the consumer price index for all urban consumers as published by the U.S. Department of Labor. The adjusted amounts will be rounded to the next highest multiple of $10, ensuring that tax brackets reflect nominal price and wage increases due to inflation.

The purpose of this legislation is to prevent "bracket creep," a situation where taxpayers may find themselves pushed into higher tax brackets due to inflationary increases in income, rather than actual increases in real income. By indexing the tax brackets, the bill aims to protect taxpayers from unintended tax increases that occur without legislative action. The changes will take effect immediately and apply to taxable years beginning on or after January 1 of the year following the bill's enactment.