Umba Sponsors Bill to Spur Investment in Small Manufacturers, Strengthen Jersey’s Supply Chain

Umba Sponsors Bill to Spur Investment in Small Manufacturers, Strengthen Jersey’s Supply Chain

 

LUMBERTON, New Jersey — With supply chain crunches leading to critical shortages of everything from semiconductors to baby formula, one South Jersey lawmaker is introducing legislation to encourage greater investment in the Garden State’s manufacturing sector.

 

Assemblyman Brandon Umba (R-Medford) introduced a bill Thursday designed to level the playing field for small- and medium-size New Jersey manufacturing firms, which operate in a field often dominated by larger companies. This bill allows firms to claim a gross income tax credit for research and development (R&D) expenses and payments in the same way that taxpayers subject to the corporation business tax may claim the credit.

 

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

 

“The supply chain snarls we are witnessing today are a warning sign that we need to invest in our manufacturing,” Umba said. “The R&D tax credit has demonstrated 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 companies structured as S corporations, limited liability companies, and limited liability partnership companies—collectively referred to as pass-through entities—will be a major beneficiary of the legislation.

 

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

 

The Assemblyman argues that the lack of a pass-through credit also places New Jersey’s manufacturing sector at a competitive disadvantage compared to neighboring states like Maryland and Pennsylvania which already allow for this innovative incentive.

 

Despite having a relatively minimal cost to the state, the R&D tax credit has proven to attract entrepreneurs, foster startup businesses, and promote private sector investment in New Jersey.

 

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