Disallows tax deduction under corporation business tax and gross income tax for punitive damages paid in connection with legal action; includes amount paid as punitive damages on behalf of taxpayer in income for tax purposes.

This bill changes New Jersey tax rules for businesses regarding punitive damages. It prevents corporations and business owners from deducting punitive damages paid in legal settlements or judgments as a business expense. Instead, the amount paid (or covered by insurance) must be included in the business's taxable income. The law applies to both the corporation business tax and gross income tax for taxable years starting after its effective date.