Provides Tax Credits To Investors in New Jersey’s Emerging Technology Businesses
TRENTON – Legislation sponsored by Senator Fred Madden (D-Gloucester/Camden) that will provide an incentive for investment groups and individuals to invest in the state’s emerging technology businesses was approved today by the Senate Budget and Appropriations Committee.
Also known as the “New Jersey Angel Investor Tax Credit Act”, the bill (S-3055) would create specific gross income and corporate business tax credits for start-up investments of up to $500,000 made in New Jersey-based high-tech and biotechnology companies. So-called “angel investors” are individual entrepreneurs – or groups – who provide the massive capital investments that start-up technology businesses need to get up and running.
“Equity investors are critical to providing the necessary capital that helps spur high tech businesses and create new and innovative technologies,” said Madden. “By offering direct tax credits to angel investors, we will provide an incentive for them to invest in New Jersey’s science and technology sectors, which will help maintain our position as a hub for these businesses and contribute to our state’s overall economic growth.”
According to a 2008 report from the Angel Capital Education Foundation, more than 20 states have implemented programs to attract or retain investment capital through income tax credits in the past decade with the belief that the reduced risk and cost of investing will encourage more entrepreneurial activity in high-growth small businesses and ultimately attract investment dollars, create jobs, and contribute to the economic growth of the state.
Because the science and technology sectors have a high potential for growth and are identified as creators of high-paying jobs, they are an ideal candidate for sector specific tax credits. New Jersey has historically been one of the top destination states for science and technology companies. However, other states have been gaining ground in recent decades. This bill would help spur investment and growth in science and technology, allowing New Jersey to maintain its position as a hub for these sectors.
“In order for New Jersey to remain competitive in attracting high-tech and biotechnology companies, we must ensure that our policies remain cutting edge,” said Senator Madden. “Paired with our highly skilled workforce, this program will provide the boost we need to attract investment to the Garden State, which will help to grow our economy and create high-paying jobs for our residents.”
The measure now heads to the full Senate for a vote.