Senator Steve Oroho’s legislation that would encourage business investment and job creation in New Jersey earned Senate approval today.

Legislation sponsored by Sen. Steve Oroho would promote job creation by encouraging business investment in small and mid-size employers. (Flickr)

The bipartisan bill, S-4127, would allow New Jersey gross income tax deductions for certain capital gains from the sale of qualified small business stock that was held for more than five years.

“This will incentivize investment in small and mid-size businesses with more favorable capital gains tax treatment on state filings,” said Oroho (R-24). “The establishment of new businesses, corporate growth, and new job opportunities will more than compensate for the deductions with revenue for the state.”

Oroho’s bill, following the lead of the federal government and most states, offers what are known as Internal Revenue Code “Section 1202” tax incentives to targeted New Jersey-based businesses owners who are willing to make a long-term commitment to investing in small and medium sized companies in the state.

All but six of the 43 states with personal income taxes provide some form of section 1202 incentives, including New York, Connecticut, Delaware, and Massachusetts.

“So many states are already utilizing the strategy because it makes good business and financial sense,” said Oroho. “Small and mid-size employers have a difficult time finding capital investors because it often takes them years to become profitable. The incentives provided by the bill make business investment more attractive.”