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(TRENTON) – Legislation Assembly Budget Chairman Lou Greenwald, Assemblyman Peter J. Barnes III. Assemblyman Gordon Johnson and Assemblywoman Nellie Pou sponsored to provide a vital tax break to the small businesses that employ many New Jerseyans was advanced Tuesday by an Assembly committee.
The bill (A-3535) is part of the Democratic legislative “Back to Work NJ” effort to create jobs and jumpstart economic development.
“If we’re going to create jobs and build a stronger economy, we need to protect the small businesses that are the lifeblood of this state,” said Greenwald (D-Camden). “It’s time to get rid of archaic tax rules that do nothing more than inhibit job creation and economic growth and help our small businesses thrive.”
“Small businesses need to be a priority as we look to position New Jersey to once again drive our national economy,” said Barnes (D-Middlesex). “Our small businesses must be free to use the creativity and innovation they are so famously good at to create jobs and spark economic development throughout our state.”
“This change will make it easier for entrepreneurs to invest in and establish new businesses by allowing them to balance losses from one venture with the gains from their established, profitable entities,” said Johnson (D-Bergen). “It’s a great gain for our business community.”
“The bill provides sole proprietors and other small business owners with a tax cut by requiring the tax code to treat them the same way as it does larger corporations,” said Pou (D-Passaic/Bergen). “This is a fair change that ultimately will benefit our workers through a strong business environment.”
Under current law, New Jersey’s personal income tax is calculated through 16 separately defined categories of income.
Unlike the federal tax code and the tax laws of 48 other states, state tax law does not permit filers who generate income from different types of businesses to offset gains derived from one business entity with losses sustained from another.
The bill would consolidate four of those income categories and give small business owners the same ability to recoup losses over 20 years that large corporations currently enjoy under a Greenwald bill signed into law two years ago.
The bill was released unanimously by the Assembly Budget Committee.