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Bill

Bill

A 232

Provides research and development tax credit under gross income tax.

2026-2027 Regular Session Introduced by Bob Auth and 5 co-sponsors

New Jersey bill creates state income tax credit for business research and development spending to encourage innovation investment and economic development.

Introduced, Referred to Assembly Science, Innovation and Technology Committee
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Bill Summary · A 232

Legislative bill overview

Bill A 232 establishes a research and development (R&D) tax credit under New Jersey's gross income tax, allowing businesses to deduct a portion of qualifying R&D expenditures from their state tax liability. The credit is designed to incentivize companies to conduct innovation activities within the state.

Why is this important

R&D tax credits are commonly used economic development tools that reduce the after-tax cost of innovation, potentially encouraging businesses to invest more in research activities or relocate to the state. For New Jersey, this could affect state revenue, business competitiveness in tech-heavy sectors, and job creation in research-focused industries.

Potential points of contention

  • Revenue impact: The state fiscal impact depends on credit size, eligibility scope, and take-up rate—potentially reducing revenue without corresponding economic growth guarantees
  • Definition of qualifying R&D: Vague or broad definitions could lead to tax avoidance, while overly narrow definitions might limit intended incentive effects
  • Equity and targeting: Questions about whether credits primarily benefit large corporations versus small businesses, and whether the credit effectively targets sectors New Jersey wants to develop

Compiled from official sources — confirm details with the bill’s official record.

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