The New Jersey Economic Development Authority (NJEDA) board approved proposed amendments to the state’s Angel Investor Tax Credit Program rules that will help fuel investments into early-stage New Jersey technology companies and bolster New Jersey’s innovation economy.
The amendments were based on expansions and revisions made to the program by both the Economic Recovery Act of 2020, which was enacted in January 2021, and legislation signed into law by Gov. Phil Murphy in 2019. Concurrently, the NJEDA board also approved publishing the proposed amendments in the New Jersey Register for a 60-day public comment period.
The New Jersey Angel Investor Tax Credit Program, which is open to both in-state and out-of-state investors, was created in 2013 to incentivize investment into emerging New Jersey technology businesses. An investor can receive a refundable tax credit equal to a percentage of their qualified investment made in a New Jersey early-stage company.
This company’s primary business must be an eligible technology which are advanced computing, advanced materials, biotechnology, carbon footprint reduction technology, electronic device technology, information technology, life sciences, medical device technology, mobile communications technology, or renewable energy technology. In addition to commercializing one of these eligible technologies, the business receiving the investment must employ fewer than 225 employees, at least 75% of whom work in New Jersey. An investment in a New Jersey emerging technology business holding company may also meet the requirements for a qualified investment.
Since the program’s inception, the NJEDA has approved 1,671 applications totaling more than $616 million invested in 102 eligible New Jersey businesses. In the first quarter of 2021 alone, 207 Angel Tax Credit Program applications were approved for a total of $5.2 million in tax credits, representing the injection of nearly $33 million into 17 emerging companies.
“Under Governor Murphy’s leadership, we have prioritized recapturing New Jersey’s role as a leader in innovation in an equitable and inclusive manner,” said NJEDA Chief Executive Officer Tim Sullivan. “The amendments approved today will ensure that we continue to help early-stage companies attract the capital they need to further their research and development or to manufacture or commercialize their technology. This, in turn, will lead to the creation of highly-skilled jobs that are necessary to support new business growth.”
Examples of proposed rule amendments approved today stemming from the Economic Recovery Act include:
The following additions were also made to the Angel Investor Tax Credit Program rules. These updates are associated to legislative actions from 2019 which have already been implemented into the current Program:
These approved amendments will be published in the New Jersey Register on September 7 for a 60-day public comment period.
In addition to the expanded Angel Investor Tax Credit program, the Economic Recovery Act creates and/or enhances a suite of programs that includes tax credits to incentivize job creation, new construction, and revitalization of brownfields and historic properties; financial resources for small businesses; support for new supermarkets and healthy food retailers in food desert communities; new funding opportunities for early-stage companies in New Jersey; and support for the growing film and digital media industry. More information about these programs is available at https://www.njeda.com/economicrecoveryact.
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