This bill proposes an exemption from New Jersey gross income tax for net gains or income derived from the sale, exchange, or other disposition of qualified small business stock, provided that such gains or income are exempt from federal taxation under section 1202 of the federal Internal Revenue Code of 1986. The language of the bill clarifies that these gains or income "are" exempt, replacing the previous wording that suggested they "is" exempt.

Additionally, the bill specifies that it will take effect immediately and will apply to taxable years beginning on or after January 1 next following the date of enactment, removing the previous retroactive application to taxable years starting in 2025. This change aims to streamline the implementation of the exemption for taxpayers engaging in transactions involving qualified small business stock.