TRENTON – Legislation sponsored by Senator Fred H. Madden and Senator Nilsa Cruz-Perez allowing holding companies that are eligible New Jersey emerging tech companies to receive tax credits under the “New Jersey Angel Investor Tax Credit Act” was signed into law today.
The law, S-158 will 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. The “New Jersey Angel Investor Tax Credit Act” established a one-time credit against an investor’s Corporation Business Tax (CBT) or Gross Income Tax (GIT) liability for 10 percent of a qualified investment made in a New Jersey emerging technology business.
“New Jersey has historically been one of the top destination states for science and technology companies,” said Senator Madden, who sponsored the 2013 law creating the New Jersey Angel Investor Tax Credit Program. “Our state is finding success with science and tech companies coming here, but there is still more work to do. This law will help us continue our efforts to provide the right rewards for these companies to grow and succeed.”
“These tax credits can attract the types of businesses our state needs to help our economy thrive and give our residents the chance to succeed. Making this investment will also help secure our state’s position as a hub for cutting edge companies and the innovations they develop,” said Senator Cruz-Perez. “The science and technology fields are creators of high-paying jobs with potential for tremendous growth and this law can go a long way.”
The law was introduced after learning that tech companies that were interested in growing in New Jersey were deemed ineligible for tax credits under the “New Jersey Angel Investor Tax Credit Act” because investments were being made into a holding company of a New Jersey emerging technology business. Under the previous law, a holding company does not fall within the definition of an emerging technology business and so would not qualify for the tax credits. The purpose of this law is to expand opportunities for high-technology businesses in New Jersey.
Angel investors are typically individuals with business or technology backgrounds who provide entrepreneurs with capital, connections, and guidance. They provide early-stage financing in a space once occupied by venture capitalists, who now invest primarily in larger deals and more mature companies.
S-158 cleared the Assembly 66-8-0 and cleared the full Senate 37-2 last year.
The law will take effect immediately.