As far as headline-generating incentive programs go, the technology business tax certificate transfer program only measures up to heavyweights such as the Economic Opportunity Act when you measure them in syllables.
After all, earlier this fall, the Economic Development Authority approved a tax break worth nearly $400 million to the American Dream complex in East Rutherford, whereas the tech tax transfer program is capped at $60 million.
But size isn't always a good indicator of strength, and that's certainly the case with this lesser-heralded program, which helps startup and early-stage companies raise capital by selling their tax losses and research development tax credits to profitable companies.
What's special about this year's announcement, which came earlier this month, was the EDA sweetening the pot for eligible companies. The $60 million cap is 21 percent more than last year, working out to roughly $1.1 million for each of the 50 startups that qualified.
It's easy to lose track of programs like this alongside Grow New Jersey or the Economic Redevelopment and Growth grant programs. But while those incentives may go a long way toward keeping, or attracting, executives at big companies who are being courted by other states like a beauty queen during prom season, the small companies that benefit from the technology business tax certificate transfer program are far more dependent on this program to grow and survive. These companies have few employees, little real estate and not much in the way of assets, but when they become successful, they have an outsized impact, bringing in-demand products to market and hiring smart, highly paid employees.
Now $1.1 million doesn't seem like a whole lot, especially when you consider the tax burden and the size of the losses companies in these industries — technology and life sciences — can ring up in their early years, but every little bit helps, especially when you're dependent on help from incubators and funding from venture capitalists to execute on a business plan.
We're pleased to see the EDA make this a more generous program for companies in these promising industries and hope they can find ways to continue to expand the value of the program to the eligible companies going forward.