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:
- Increasing the amount of tax credits available annually under the program from $25 million to $35 million.
- Expanding the definition of a qualified investment to include investment commitments made into qualified venture funds. “Venture fund” means a partnership, corporation, trust, or limited liability company that invests cash in a business during the early or expansion stages of a business in exchange for an equity stake in the business in which the investment is made. “Venture fund” may include a venture capital fund, a family office fund, or a corporate investor fund, provided that a professional manager administers the venture fund.
- For an investment commitment to a venture fund be eligible as a qualified investment, the venture fund must be a “qualified venture fund” investing a minimum of 50% of the venture fund’s committed capital in New Jersey based businesses. In addition, a 5% bonus is available if the fund invests 50% of its funds in New Jersey diverse entrepreneurs.
- Increasing the amount of tax credits available per qualified investment in an emerging New Jersey technology business from 10% to 20%.
- Adding a 5% bonus credit for qualified investments made in a New Jersey certified minority-or women-owned technology business or a technology business that is located in a qualified Opportunity Zone or New Markets Tax Credit Census Tract.
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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