New Jersey’s Research and Development Tax Policy Must Be Fixed

Mike Puzyk, a partner in our Tax and Benefits team, highlights how New Jersey’s July 2023 legislation, aimed at encouraging in-state research and development (R&D) activity, inadvertently benefits larger companies while leaving smaller firms at a disadvantage. The law allows businesses subject to the Corporation Business Tax to immediately deduct R&D expenses, but excludes those subject to the Gross Income Tax. This creates a disparity that could undermine New Jersey’s efforts to attract and support startups, as smaller research firms miss out on the same benefits available to larger corporations.