The New Jersey Business & Industry Association (NJBIA) today applauded the Assembly Commerce and Economic Development Committee for approving a bill to extend the Angel Investor Tax Credit program to holding companies making investments in high-tech businesses.
“This legislation would give technology startups easier access to the capital they need to bring their innovative products to the marketplace,” said Andrew Musick, NJBIA’s director of Taxation and Economic Development. “New Jersey’s small science and technology businesses need better access to capital so that they can grow, create jobs, and keep New Jersey’s high-tech economy moving forward.”
The bill, A-3631/S-158, would expand the New Jersey Angel Investor Tax Credit Act to allow the tax credit for qualified investments in a New Jersey emerging technology business to also be taken by holding companies that make a verified transfer of funds to their high-tech subsidiary in the same taxable year. Currently, the program requires investors to provide funds directly to the subsidiary to obtain the tax credit.
In addition, the bill allows for the distributions of tax credits in connection with qualified investments made by New Jersey S corporations. Shareholders receiving a distributive credit may then claim those credits to reduce gross income tax liability.
Under the program, taxpayers seeking to claim the Angel Investor Tax Credit must receive approval from the NJ Economic Development Authority, which is permitted to make up to $25 million in tax credits available for qualified investments. In 2015, the state awarded $5.1 million in tax credits in connection with 213 qualified investments in 28 different companies.
