The board of the New Jersey Economic Development Authority on Wednesday released updated rules and regulations for the Net Operating Loss Program — including new measures to support woman- and minority-owned businesses.
The NOL Program enables tech and life sciences companies to sell their New Jersey net operating losses and/or research & development tax credits for cash. Buyers can purchase tax credits at a discount and apply them to reduce taxable income.
The updated rules incorporate changes mandated in the 2020 Economic Recovery Act, including increasing the NOL Program’s annual cap from $60 million to $75 million and raising the lifetime cap for an individual company from $15 million to $20 million.
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The updated rules also expand the type of participating companies subject to the initial allocation to include companies located within an Opportunity Zone and certified woman- or minority-owned businesses.
To date, more than $1.07 billion in funding has been distributed to over 550 technology and life sciences companies since the NOL Program’s inception in the late 1990s. In 2020, 49 companies were approved to sell a combined $54 million through the program. The average award for companies approved to sell their net operating losses through the program last year was $1.1 million.
Draft NOL Program rules will be available for public comment until Nov. 24. Members of the public can review the rules and provide comment here.