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The New Jersey Business & Industry Association today urged the Assembly to support extending the successful Angel Investor Tax Credit Program to holding companies making investments in high-tech businesses.
“The Angel Investor Tax Credit Program has become tremendously successful at spurring investment in New Jersey startup companies,” said Andrew Musick, NJBIA’s vice president of Taxation and Economic Development. “Last year, the program had its best year to date with the approval of 251 applications leading to more than $96 million in private investments.
“Angel investors provide technology startups with the capital they need to bring their innovative products to the marketplace, and this bill would promote such investments in New Jersey companies,” Musick said.
“New Jersey’s small science and technology businesses need access to capital to grow, create jobs, and keep New Jersey’s high-tech economy moving forward,” Musick said.
The bill, A-3631 (Quijano, D-20; Schaer, D-36)/S-158, (Madden, D-4; Cruz-Perez, D-5), passed the Assembly on March 16 and was sent to Gov. Chris Christie. It would expand eligibility under the New Jersey Angel Investor Tax Credit Act to include investments in the holding companies of qualified New Jersey emerging technology businesses. 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.