ASSEMBLY BUDGET COMMITTEE

STATEMENT TO

ASSEMBLY COMMITTEE SUBSTITUTE FOR

ASSEMBLY, No. 4455

with committee amendments

STATE OF NEW JERSEY

DATED:  JUNE 26, 2025

      The Assembly Budget Committee reports favorably and with committee amendments Assembly Bill No. 4455 ACS.

      As amended and reported, this bill would allow an exemption from New Jersey gross income for the capital gains or income derived from the sale or exchange of qualified small business stock (QSBS) to the extent that such gains or income 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 are 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.

COMMITTEE AMENDMENTS:

      The committee amendments revise the bill to:

      (1) provide that the bill’s provisions apply to taxable years beginning on or after the January 1 next following the date of enactment; and

      (2) make technical changes.

FISCAL IMPACT:

      The Office of Legislative Services estimates this bill will result in annual State revenue losses of $10 million to $12. million annually, beginning in FY 2027.