ASSEMBLY, No. 1154

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Assemblymen COHEN and SULIGA

An Act allowing the exclusion of certain interest and dividends from taxation under the gross income tax, supplementing Title 54A of the New Jersey Statutes.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. Gross income shall not include payments of up to $3,500 of interest or dividends otherwise includable in gross income pursuant to subsections e. or f. of N.J.S.54A:5-1.

    2. This act shall take effect immediately and apply to taxable years ending after its enactment.

STATEMENT

    This bill provides personal savings and investment incentives by allowing taxpayers to exclude the first $3,500 received as interest or dividends. Currently, taxpayers can exclude the interest and gain from specialized investment instruments like tax exempt bonds or qualified tax exempt mutual funds. These investments typically have high initial investment requirements. This bill provides an exclusion for the first $3,500 received as interest or dividends, which would apply to the earnings of a savings account, a certificate of deposit, or the dividends of common stock purchased through a taxpayer's employer.

Allows gross income tax exclusion of $3,500 of interest and dividends.