ASSEMBLY APPROPRIATIONS COMMITTEE

STATEMENT TO

ASSEMBLY COMMITTEE SUBSTITUTE FOR

ASSEMBLY, No. 4455

STATE OF NEW JERSEY

DATED:  JUNE 19, 2025

      The Assembly Appropriations Committee reports favorably an Assembly Committee Substitute for Assembly Bill No. 4455.

      As reported, this committee substitute would allow an exemption from New Jersey gross income for the capital gains derived from the sale or exchange of qualified small business stock (QSBS) to the extent that such gains are exempt for the purposes of federal taxation pursuant to section 1202 of the federal Internal Revenue Code of 1986.

      Under federal law, gains derived from the sale or exchange of QSBS that is held for more than five years is exempt from federal income taxation provided that the aggregate amount of such gain from dispositions of stock issued by such corporation which may be taken into account for the taxable year does not exceed the greater of either: (1) $10 million reduced by the aggregate amount of eligible gain taken into account by the taxpayer in prior taxable years; or (2) 10 times the aggregate adjusted basis of QSBS issued by such a corporation and disposed of by the taxpayer during the taxable year.

FISCAL IMPACT:

      The Executive estimates that the bill would result in a State revenue loss of $10.4 million in FY 2026.