They say good things come in threes.
And so goes three of the more pro-innovation and pro-manufacturing recommendations in Gov. Phil Murphy’s proposed FY26 budget, with just 10 days to go before the state’s spending plan needs to be finalized.
On Thursday, three bills strongly supported by NJBIA and part of the governor’s budget, all advanced in the Assembly Appropriations Committee.
“This is a great sign,” said NJBIA Chief Government Affairs Officer Christopher Emigholz. “Certainly, there has been criticism of certain tax increases or pro-business funding reductions in the initial budget proposals, but we must be fair and mindful about the positives in the governor’s plan.
“We were happy to testify in support of these bills this week and to see such overwhelming support for them from our lawmakers. We will continue to urge their passage to the governor’s desk.”
The three key bills advancing include:
- A-2365 (Tully, D-38; Murphy D-7; DePhillips, R-40): Increases amount of tax credits for investments made in certain technology business ventures under the New Jersey Angel Investor Tax Credit Act.
- A-4455 (Freiman, D-16; Schaer, D-36, Karabinchak, D-18): Allows for a deduction from New Jersey gross income of certain capital gains from sale or exchange of New Jersey qualified small business stock (QSBS) held for more than five years.
- A-5687 (Greenwald, D-6; McClellan, R-1; Reynolds-Jackson, D-15): Establishes “Next New Jersey Manufacturing Program” to incentivize in-state manufacturing investments and job creation.
The latter of the three is perhaps the most compelling in that it uses $500 million from the existing Aspire and Emerge tax credit programs, under the direction of the New Jersey Economic Development Authority.
It requires no new additional funding and enjoys bipartisan support from the Legislature’s Manufacturing Caucus. And the bill appears just as the previous and successful Manufacturing Voucher Program has been zeroed out in the FY26 budget.
“Manufacturing is important, and we need to get back to making more things in New Jersey and in our country because that’s what makes the economy go,” Emigholz told the Assembly Labor Committee earlier this week in another vote.
“Manufacturing is under attack to some extent,” he said. “There’s great federal uncertainty with some of the manufacturing programs that companies rely upon around the country that are looking to be cut. The tariff uncertainty and the supply chain uncertainty are things manufacturers are struggling with ... so this bill is necessary for an important industry.”
While one lawmaker was critical of a provision in the bill that requires $100 million of the program to have a clean energy dedication – he labeled it a ‘wind bill”. Emigholz said that criticism was both inaccurate and short-sighted.
“It isn’t a perfect bill, but let’s be clear – it’s only 20% of the program and the definition of clean energy includes nuclear, which by all accounts will be increasing in New Jersey,” Emigholz said.
“And even if you don’t support wind power, if a New Jersey manufacturer is creating parts or mechanisms for wind projects anywhere else in the world, our state is the beneficiary of the jobs and revenue created.”
A-2365 is also on the positive path, as it would increase tax credits provided under the New Jersey Angel Investor law for qualified investments made in New Jersey’s emerging technology business ventures.
The bill, and its Senate counterpart (S-3189), increases the value of tax credits from 20% to 35% of a taxpayer’s qualified investment in an emerging technology startup or venture fund.
The additional 5% bonus under current law means that investments made in emerging technology businesses located in low-income communities, or state certified as a minority- or women- owned enterprises, could be eligible for a tax credit of up to 40%.
“We strongly support this bill because it incentivizes investments in startups and stimulates innovation in fast-growing industries,” Emigholz said.
“Investments in emerging technology businesses lead to more than just patents; they spur economic activity and produce well-paying jobs.”
While bill A-4455 is a bit more technical in nature, the benefits are clear:
New Jersey is currently one of only five states that does not conform to federal QSBS tax standards, meaning investors in the Garden State are taxed on QSBS gains at the full state income tax rate. The federal tax code allows for a partial exclusion.
This legislation allows for a deduction from New Jersey gross income of certain capital gains from sale or exchange of New Jersey (QSBS) held for more than five years.
“Ending our uncompetitive and outlier tax treatment of investments in innovative start-ups is one of the best ways to attract capital to grow jobs, our economy and our tax revenues,” Emigholz said.
“It’s a big win if we can get this done. But l’m hopeful all three of these bills can get to the finish line to boost our innovation economy. We thank the governor and the Legislature for putting it on the path.,” Emigholz said.
