Umba sponsors bill to boost investment in small manufacturers and strengthen Jersey’s supply chain

Umba sponsors bill to boost investment in small manufacturers and strengthen Jersey’s supply chain

LUMBERTON, New Jersey – As supply chain difficulties lead to critical shortages of everything from semiconductors to infant formula, a South Jersey lawmaker introduces legislation to encourage greater investment in manufacturing of the Garden State.

MP Brandon Umba (R-Medford) on Thursday introduced a bill to level the playing field for small and medium-sized manufacturing companies in New Jersey, which operate in a field often dominated by big business. This bill allows companies to benefit from a gross income tax credit for research and development (R&D) expenses and payments in the same way as taxpayers subject to corporation tax can benefit from it.

Umba’s bill encourages investment in the state’s innovation economy, allowing small businesses to deduct a portion of their research and development expenses from their taxes, as large corporations can.

“The supply chain issues we are witnessing today are a warning sign that we need to invest in our manufacturing,” Omba said. “The R&D tax credit has been proven time and time again to generate a substantial return on investment and create jobs right here in the state of New Jersey.”

The state’s manufacturing sector, which has many corporations structured as S corporations, LLCs, and limited liability partnerships, collectively referred to as flow-through entities, will be one of the primary beneficiaries of the legislation.

“Due to the current tax structure, not all companies can benefit from the R&D tax credit, which can only be applied to corporation tax”, Umba continued. “New Jersey is the state of innovation, and my legislation will level the playing field for all innovators, encouraging investment in technology and new products developed by companies of all sizes.”

The Assemblyman argues that the lack of transfer credit also puts New Jersey’s manufacturing sector at a competitive disadvantage to neighboring states like Maryland and Pennsylvania, which already allow this innovative incentive.

Although it has a relatively minimal cost to the state, the R&D tax credit has been shown to attract entrepreneurs, encourage start-ups, and promote private sector investment in New Jersey.

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