Bill
Bill > A3411
NJ A3411
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
02/15/2018
02/15/2018
In Committee
02/15/2018
02/15/2018
Crossed Over
Passed
Dead
01/08/2020
01/08/2020
Introduced Session
2018-2019 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 Earnings in the account are not taxed until withdrawn.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equipment, machinery, or workforce development, a qualified manufacturer receives a one-half rate reduction on the withdrawn account earnings.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 bill allows qualified manufacturers with no more than 50 employees to deduct up to $100,000 annually for five years when depositing into a manufacturing reinvestment account held by a New Jersey bank. Earnings in the account are not taxed until withdrawn, and withdrawals for qualified reinvestment expenditures, such as purchasing manufacturing equipment or providing workforce training, are subject to a reduced tax rate. The bill aims to make it easier for small manufacturing businesses in New Jersey to invest in their operations and workforce.
Committee Categories
Business and Industry
Sponsors (3)
Last Action
Introduced, Referred to Assembly Commerce and Economic Development Committee (on 02/15/2018)
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/2018/Bills/A3500/3411_I1.HTM |
Bill | https://www.njleg.state.nj.us/2018/Bills/A3500/3411_I1.PDF |
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