Angel Investor Tax Credit Expansion Will Bolster High-Tech Business, NJBIA Says

The new law extending the successful Angel Investor Tax Credit Program to holding companies will make it easier for high-tech businesses to attract investments in their companies, the New Jersey Business & Industry Association said today as Gov. Chris Christie signed the bill, S-158 (Madden, D-4; Cruz-Perez, D-5)/A-3631 (Quijano, D-20; Schaer, D-36).

“This law will promote investments that provide technology startups with the crucial capital they need to bring their innovative products to the marketplace,” said Andrew Musick, NJBIA’s vice president of Taxation and Economic Development.

“Since the program began in 2013, the program has approved over $220 million in investments made to 51 New Jersey technology and life sciences companies,” Musick said. “By extending the program to holding companies, the Angel Investor Tax Credit Program will be better able to spur investment in New Jersey companies.

“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.

Angel investors can now invest in the holding companies of qualified New Jersey emerging technology businesses. Previously, they had to provide funds directly to the subsidiary to obtain the tax credit.

For investments made by New Jersey S corporations, shareholders receiving a distributive credit can 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 2016, the state approved 251 applications through the program, which represented over $96 million in private capital into technology and life sciences companies throughout the Garden State.