The Angel Investor program, which was created in 2013, provides refundable tax credits against the corporation business or gross income tax for a specified percentage of qualified investment in a technology business that conducts research, manufacturing, or technology commercialization.
Musick noted that in 2017, $11 million in Angel Investor tax credits spurred more than $111 million in investment in 39 New Jersey companies, according to the New Jersey Economic Development Authority. By doubling the percentage of the available tax credit, high-tech startup businesses in New Jersey will become even more financially attractive to investors, Musick said.
“Increasing venture capital is important because NJBIA’s Indicators of Innovation report found that New Jersey lags far behind other states in our region in total venture capital investment,” Musick said. “This change to the Angel Investor Tax Credit program will help boost our innovation economy.”
Under the law, the expanded credit applies to taxable years beginning or after Jan. 1, 2020. The program remains capped at $25 million annually, but the program has yet to utilize that maximum cap. The average cap utilization was only $10 million per year during 2016-2018.