A new year means some new investment incentive opportunities, the New Jersey Economic Development Authority said last week, as it issued a reminder that the expansion of the state’s Angel Investor Tax Credit Program is now in effect.
“With the enhancements to our Angel Investor Tax Credit signed into law by Gov. (Phil) Murphy, New Jersey now has one of the most progressive and potent tools of any state to encourage investment in early-stage innovation companies,” Tim Sullivan, the CEO of the NJEDA, said. “With this tool in the toolkit, we will be able to attract and grow more of the growing companies that will inject new vitality into the Garden State economy.”
More than $530 million in investments have been leveraged through the program since its inception in 2013.
Administered by the NJEDA with assistance from the Department of the Treasury’s Division of Taxation, New Jersey’s Angel Investor Tax Credit Program offers a refundable tax credit against New Jersey corporate business or gross income tax for qualified investments in emerging technology or life sciences businesses with a physical presence in the state.
To qualify, businesses and/or investors must:
- Conduct research, manufacturing, or technology commercialization in the state;
- Have fewer than 225 employees — three-fourth of which must work in New Jersey;
- Submit applications to the program within six months of making an investment.
This past summer, Murphy signed into legislation significant expansions to the program, including:
- An increase in the tax credit from 10% to 20%;
- An additional 5% bonus for investments in businesses located in qualified Opportunity Zones or low-income communities;
- An additional 5% bonus for investments in businesses certified by the state as minority- or women-owned.
“Increasing the benefit investors receive for injecting capital into young companies is an important step in positioning New Jersey as a leader in innovation,” Murphy said. “New Jersey’s most precious asset is its people and encouraging investment in minority- and women-owned businesses will help to create the most diverse and inclusive innovation economy in the nation.”
The expansion has been lauded by both the business and investor communities.
“New Jersey companies have long led the way in medical innovation, and expanding the Angel Investor Tax Credit Program will enable them to attract even more investments and receive critical funding to further their life-saving and life-enhancing missions,” said Debbie Hart, CEO and president of BioNJ and vice chair of the New Jersey Commission on Science, Innovation and Technology.
“By expanding the Angel Investor Tax Credit Program, New Jersey is acknowledging and mitigating the inherent risk that comes with investing in early-stage companies, which often take a long time to reach profitability,” said Stephanie Caravela, managing director of Jumpstart NJ Angel Network. “This expansion will have a profound and lasting impact on the innovation community for years and decades to come.”
Visit www.njeda.com/angeltaxcredit for more information.