Bill Text: NJ S4536 | 2026-2027 | Regular Session | Amended
Bill Title: Imposes temporary $1 million cap on use of net operating loss deductions under corporation business tax for certain privilege periods.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced) 2026-06-30 - Substituted by A5322 (1R) [S4536 Detail]
Download: New_Jersey-2026-S4536-Amended.html
Sponsored by:
Senator NICHOLAS P. SCUTARI
District 22 (Somerset and Union)
SYNOPSIS
Imposes temporary $1 million cap on use of net operating loss deductions under corporation business tax for certain privilege periods.
CURRENT VERSION OF TEXT
As reported by the Senate Budget and Appropriations Committee on June 28, 2026, with amendments.
An Act imposing a temporary $1 million cap on the use of net operating loss deductions under the corporation business tax and supplementing P.L.1945, c.162 (C.54:10A-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. As used in this section, "net operating loss deduction" means the amount of any deduction taken by a taxpayer for a net operating loss carryover, prior net operating loss conversion carryover, post-allocation net operating loss, net operating loss carryover in a combined group context, or any combination thereof.
b. Notwithstanding the provisions of paragraph (6) of subsection (k) or subsections (u) and (v) of section 4 of P.L.1945, c.162 (C.54:10A-4), section 18 of P.L.2018, c.48 (C.54:10A-4.6), or any other law to the contrary, for the purposes of computing taxable net income, as that term is defined in subsection (w) of section 4 of P.L.1945, c.162 (C.54:10A-4), the amount of any net operating loss deduction claimed by a taxpayer1, except for a public utility,1 shall not, in the aggregate, exceed $1,000,000 for a privilege period ending on or after July 31, 2026 but before July 31, 2030. For a taxpayer with a privilege period of less than twelve months, the limit set forth in this subsection shall be prorated by the number of months covered during the privilege period.
c. Notwithstanding the provisions of any law to the contrary, for a privilege period ending on or after July 31, 2030 but before July 31, 2032, for the purposes of computing taxable net income, as that term is defined in subsection (w) of section 4 of P.L.1945, c.162 (C.54:10A-4), a taxpayer that is disallowed any portion of a net operating loss deduction pursuant to the limitations imposed by subsection b. of this section shall be allowed the amount of the net operating loss deduction that remains unused due to the limitations of subsection b. of this section, except that the deduction may reduce the taxpayer's allocated entire net income by no more than 75 percent for the privilege period.
d. A taxpayer with a deduction that was reduced or disallowed pursuant to the limitations set forth in subsection b. or c. of this section, as applicable, shall be permitted to carry over the amount of the net operating loss deduction that remains unused due to the limitations of those subsections for an additional six privilege periods immediately following the privilege period during which the net operating loss deduction would have otherwise expired.
e. The limitations imposed by this section shall not restrict the surrender or acquisition of a corporation business tax benefit certificate pursuant to section 1 of P.L.1997, c.334 (C.34:1B-7.42a) and shall not restrict the application of a corporation business tax benefit certificate acquired pursuant to section 2 of P.L.1997, c.334 (C.54:10A-4.2).
f. Notwithstanding the provisions of any law to the contrary, no interest or penalty shall be assessed against a taxpayer for an underpayment of an installment payment of estimated tax pursuant to section 5 of P.L.1981, c.184 (C.54:10A-15.4), provided that:
(1) the installment payment is due and payable after December 31, 2025 but before January 1, 2027; and
(2) the underpayment of estimated tax results from the limitations imposed by subsection b. or c. of this section, as applicable.
2. This act shall take effect immediately and shall apply to any privilege period ending on or after July 31, 2026.
