the staff of the Ridgewood blog
Trenton NJ, after successfully doubling the angel investor tax credit in 2019, Assemblyman Christopher DePhillips is seeking to increase it again to support technology startups and boost the innovation economy in New Jersey.
His bill (A2365) increasing the credit to 35% from 20% of an investor’s qualified investment in an emerging technology business was unanimously approved in the Assembly Science, Innovation and Technology Committee on Thursday.
“In order to be a leader in research and development, artificial intelligence, the life sciences and state-of-the-art advancements that touch every part of this state, New Jersey needs to be more attractive to startups and their investors,” DePhillips (R-Bergen) said. “New Jersey’s venture capital funding currently lags behind neighboring states. An enhanced tax credit will further reduce the financial risks assumed by investors, which makes New Jersey more attractive.”
New Jersey ranks 13th nationally in venture capital dollars flowing into the state, behind New York, Pennsylvania and Virginia. The size of credits available to angel investors in New Jersey also fall short of regional competitors like Maryland, Massachusetts and Connecticut.
The tax credit program currently has a $35 million annual cap. To qualify, the businesses cannot have more than 150 employees. If an emerging business is located in a low-income community, or is minority or women owned, the tax credit increases to 40% from 25% of the investment.
“The goal here is to further incentivize investment in New Jersey’s early stage startups, not just to grow the technology industry, but to support jobs and stimulate the economy. This legislation signals to the industry that New Jersey can not only compete nationally, but globally in the innovation economy,” DePhillips said.
The New Jersey Economic Development Authority approved 467 angel investor tax credit applications for the program in 2022, which represents investment in 30 New Jersey businesses.
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