TRENTON, N.J. – Among the numerous bills passed by the Assembly yesterday was a key piece of legislation, sponsored by Assemblyman Christopher P. DePhillips, designed to boost emerging technology businesses in the state.
“We need to do everything we can to keep innovative and growing companies in New Jersey,” said DePhillips (R-Bergen). “Young entrepreneurs and angel investors are creating opportunities and jobs that have great potential.”
DePhillips’ bill, A5604, will increase the angel-investor tax credit from 10 percent to 20 percent. If the start-up is located in an opportunity zone, low-income community, or is minority or woman-owned, the credit is 25 percent. The legislation passed the Assembly 75-2.
This tax credit program is intended to encourage investment in advanced computing, biotechnology, life sciences, electronic and medical device technology, and information, mobile communications and renewable energy technology businesses.
“We need to give investors an incentive to invest in New Jersey so we can compete and be true leaders in innovation,” said DePhillips. “During my time on the New Jersey Biotechnology Task Force, I heard from many professionals in emerging industries who cited a great demand for private investment.”
A 2017 economic report by McKinsey & Co., an international management consulting firm, showed the lack of fast-growing young firms and higher proportion of older corporations is contributing to the state’s sluggish economy. Young companies can quickly double in size and add jobs for many years while mature businesses generate few new jobs.
To qualify for the tax credit, the emerging technology business must employ fewer than 225 employees and at least 75 percent must work in the state. The maximum allowed credit is $500,000 for each qualified investment and the program is capped at $25 million annually.