Bill
Bill > A2624
NJ A2624
Establishes a manufacturing reinvestment account program to incentivize capital investment and workforce training in New Jersey with income tax rate reductions, deferrals, and accelerated deductions.
summary
Introduced
02/13/2020
02/13/2020
In Committee
03/05/2020
03/05/2020
Crossed Over
Passed
Dead
01/11/2022
01/11/2022
Introduced Session
2020-2021 Regular Session
Bill Summary
This bill establishes a manufacturing reinvestment account program to incentivize capital investment and workforce training in New Jersey through the use of income tax rate reductions, deferrals, and accelerated deductions. The purpose of this bill is to make it easier for New Jersey's small businesses to invest in manufacturing machinery, equipment, and workforce development. The bill offers three incentives for New Jersey's small manufacturing businesses through the gross income tax and corporation business tax: (i) an accelerated deduction for amounts deposited in a manufacturing reinvestment account for future use on qualified capital purchases and workforce training; (ii) deferred taxation on account earnings; and (iii) a rate reduction for the earnings on account deposits upon distribution. The bill is structured to offer these incentives through one manufacturing reinvestment account program. The bill's manufacturing reinvestment account program allows qualified manufactures to make a deductible deposit of up to $100,000 annually in an account for five years. Earnings in the account are not taxed until withdrawn. For withdrawals made during the account's five-year life for spending on New Jersey based manufacturing equipment, machinery, or workforce development, a qualified manufacturer receives a one-half rate reduction on the withdrawn account earnings. Nonqualified withdrawals are included in whole in taxable income without the rate reduction on earnings. To qualify for the manufacturing reinvestment account program, the bill requires a manufacturer to have no more than 50 employees and be in good tax standing. The bill restricts qualified manufacturing reinvestment accounts to those accounts offered by financial institutions in New Jersey to accept solely cash deposits and bear interest. The bill is scheduled to take effect immediately and apply to tax years beginning on or after the date of enactment.
AI Summary
This bill establishes a manufacturing reinvestment account program to incentivize capital investment and workforce training in New Jersey through income tax rate reductions, deferrals, and accelerated deductions. The program allows qualified manufacturers (with 50 or fewer employees and in good tax standing) to make up to $100,000 in annual deductible deposits to a manufacturing reinvestment account held by a New Jersey financial institution. Earnings in the account are not taxed until withdrawn, and qualified withdrawals for manufacturing equipment or workforce development receive a 50% reduction in the applicable tax rate. The bill is structured to provide these tax benefits for five consecutive privilege periods or taxable years starting from the first deposit.
Committee Categories
Budget and Finance, Business and Industry
Sponsors (5)
Jamel Holley (D)*,
Robert Karabinchak (D)*,
Carol Murphy (D)*,
Nicholas Chiaravalloti (D),
Verlina Reynolds-Jackson (D),
Last Action
Reported out of Asm. Comm. with Amendments, and Referred to Assembly Appropriations Committee (on 03/05/2020)
bill text
bill summary
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bill summary
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bill summary
Document Type | Source Location |
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BillText | https://www.njleg.state.nj.us/2020/Bills/A3000/2624_R1.HTM |
Bill | https://www.njleg.state.nj.us/2020/Bills/A3000/2624_R1.PDF |
BillText | https://www.njleg.state.nj.us/2020/Bills/A3000/2624_I1.HTM |
Bill | https://www.njleg.state.nj.us/2020/Bills/A3000/2624_I1.PDF |
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