Bill > S1620

Introduced Session

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 Earnings in the account are not taxed until withdrawn.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equipment, machinery, or workforce development, a qualified manufacturer receives a one-half rate reduction on the withdrawn account earnings.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.

Committee Categories

Robert Andrews (D)*,  Jeff Van Drew (R)*,  Anthony Bucco (R), 

Introduced in the Senate, Referred to Senate Economic Growth Committee (on 02/16/2016)