MADDEN LEGISLATION EXPANDING TAX BREAKS TO TECH COMPANIES CLEARS COMMITTEE

Senators Fred H. Madden (D-Camden and Gloucester)

TRENTON – Legislation sponsored by Senator Fred H. Madden allowing holding companies that are eligible New Jersey emerging tech companies to receive tax credits under the “New Jersey Angel Investor Tax Credit Act” cleared the Senate Economic Growth Committee today.

This bill, S-158 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. 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.

“This bill is about establishing a solid foundation for our science and tech companies to grow,” said Senator Madden (D-Gloucester/Camden). “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 specific tax credits.  New Jersey has historically been one of the top destination states for science and technology companies, so we want to provide the right rewards for these companies to grow here.” 

The senator introduced the bill 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. Currently, under the 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 bill 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 committee 4-0. Next it heads to the Senate Budget and Appropriations Committee.

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