Bill Would Provide Small Businesses With A Tax Exemption for Creating New Jobs
TRENTON – Legislation sponsored by Senators Peter J. Barnes III and Linda R. Greenstein that would incentivize small business owners to create jobs in New Jersey was approved today by the Senate Economic Growth Committee.
“Small businesses are vital to the health and stability of New Jersey’s economy, responsible for roughly half of New Jersey’s workforce,” said Senator Barnes, D-Middlesex. “Many of these small companies are working on tight budgets that make expansion and growth difficult. By allowing companies with less than 100 employees to invest tax-free in workforce expansion we are not only supporting these businesses’ ability to grow, but also helping to create new jobs in a state that has seen stagnant and slow job growth since the recession.”
The bill, S-2350, would allow small business owners to create a tax-free bank account at a New Jersey bank and to use the funds for job creation and preservation of full-time workforce positions. In essence, the bill would allow small business owners to not pay state corporation business taxes and gross income taxes on interest accrued through these bank accounts which would be used solely for job creation in New Jersey.
“The majority of the state’s business incentive programs target medium to large size businesses that already have the capacity to continue investing in their operations and their workforce,” said Senator Greenstein, D-Middlesex and Mercer. “By targeting small business owners with an economic investment, we can give them a hand to continue to expand and grow their companies. With this, the health of our small business community and our workforce will continue to improve.”
Under the bill, a small business is defined as an independently-owned business with less than 100 employees. The business must not have state tax assessment associated with fraud or negligence.
The Committee approved the legislation with a vote of 5-0. It now heads to the Senate Budget and Appropriations Committee for further review.