The state legislature has introduced two new bills that would increase the tax credit under the New Jersey Angel Investor Tax Credit Act from 10 to 25 percent.
Companion bills S2298 and A3677 would offer the refundable credit against state corporation business, or income, tax for private investments in startup technology companies with fewer than 225 employees in the fields of research, manufacturing or technology commercialization. It would be run by the New Jersey Economic Development Authority in consultation with the New Jersey Division of Taxation.
State Senator Kristin Corrado, R – Passaic, one of the sponsors of S2298, cited a two-year-old economic report by consulting firm McKinsey & Co. as the reason for the bill. The report essentially stated that New Jersey’s slow GDP growth is the result of a lack of fast-growing young firms and a higher proportion of older corporations.
“This bill will allow us to maintain our competitive advantage over surrounding states,” said Assemblyman Christopher DePhillips, R – 40th District, one of the sponsors of A3677. “The change to the Angel Tax Credit program will incentivize life science companies and angel investors to come to New Jersey, stay and invest here. We need to keep innovative industries here.”