Legislation sponsored by Senator Steve Oroho that would encourage business investment and job creation in New Jersey was approved today by the Senate Budget and Appropriations Committee.

Legislation sponsored by Sen. Steve Oroho that would encourage business investment and job creation in New Jersey was approved by the Senate Budget and Appropriations Committee. (Pixabay)

Oroho’s 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.

“With this bill, we will incentivize investment in small and mid-size businesses with more favorable capital gains tax treatment on state filings,” said Oroho (R-24). “We would see the development of new businesses, corporate expansion, and the formation of job opportunities that will more than make up for any revenue for the state.”

Following the lead of the federal government and the majority of states, the bill 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 a personal income tax provide some form of section 1202 incentives, including New York, Connecticut, Delaware, and Massachusetts.

“It makes good business and financial sense, and that’s why so many states are already utilizing the strategy,” said Oroho. “Small and mid-size employers have a tough time finding capital investors because it takes them years to start making money and become profitable. The incentives provided by the bill make business investment more attractive.”