This bill establishes a manufacturing reinvestment account program in New Jersey aimed at encouraging small manufacturing businesses to invest in capital and workforce training. Qualified manufacturers, defined as those with 50 or fewer employees and in good standing with state tax obligations, can deposit up to $100,000 annually into a manufacturing reinvestment account for a maximum of five years. The program offers three main tax incentives: a deduction for contributions to the account, deferred taxation on account earnings, and a reduced tax rate on earnings when withdrawn for qualified expenditures, such as purchasing machinery or funding workforce training.

The bill specifies that earnings on contributions to the manufacturing reinvestment account are not included in taxable income until distributed. If the funds are used for qualified reinvestment expenditures, the earnings are taxed at half the standard rate; however, nonqualified withdrawals are fully taxable. The Department of the Treasury is tasked with establishing guidelines for the program, which is designed to support the growth and sustainability of small manufacturing businesses in New Jersey. The act will take effect immediately and apply to privilege periods and taxable years starting after its enactment.