TRENTON – Legislation intended to promote investment in emerging technology businesses that can create jobs and economic growth for New Jersey was released Tuesday by an Assembly panel.
The bill (A-3592) is known as the New Jersey Angel Investor Tax Credit Act. Angel investments are known as equity placements by wealthy individuals into high-risk start-up ventures.
The bill establishes credits against corporation business and gross income taxes for investing in New Jersey emerging technology businesses.
Subject to certain limitations, the corporation business and gross income tax credits would equal 10 percent of a taxpayer’s qualified investment in an emerging technology company with fewer than 225 employees, of whom at least 75 percent are filling a position in New Jersey.
Purchase, production and research agreements would qualify as creditable investments.
The program is subject to a $25 million annual cap.
Also, tax credit recipients cannot claim tax credits for that part of an investment in a single company that exceeds $500,000.
If the tax credit amount exceeds a gross income taxpayer’s tax liability, the state will issue a refund to the taxpayer in the amount of the excess, while a corporation business taxpayer may choose between having the amount of the excess refunded or carried forward to be applied against tax liabilities in the next 15 years.
The bill was released 8-2-1 by the Assembly Budget Committee.
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