Lawmakers are hoping to boost the state’s Angel Investor Tax Credit program, a lesser known economic incentive which helps businesses recoup some of the costs of emerging in New Jersey technology startups.
The expansion, proposed under Senate Bill 2298, would let applicants get a refund from the state on up to 25 percent of their expenses, up from 10 percent under the existing program.
Like with the program in its current form, applicant’s refunds would still be capped at $500,000, and the program would still be capped at $25 million.
“New Jersey has one of the most highly educated workforces in the nation,” sponsor Sen. Kristin Corrado, R-40th District, said in a Monday statement. “What we’re missing is a tax environment that encourages investors to put that talent to work in new tech businesses right here in the Garden State.”
Gov. Phil Murphy in his “State of Innovation” for a new set of economic incentives proposed an expansion of allowing refunds for up to 20 percent of investments.
“We are seeing a significant upswing in interest in the Angel Investor Tax Program this year, which furthers Gov. Murphy’s goal of creating a stronger and fairer economy by not only investing in emerging companies but also attracting capital into our state,” Tim Sullivan, chief executive of the Economic Development Authority – which oversees the program – said in a 2018 statement.
But the expansion of the tax incentive pales in comparison to the raging debate over New Jersey’s largest incentive, the Grow New Jersey corporate tax breaks which are set to expire on July 1.
The governor’s scrutiny into the program came to a head Monday when a task force he convened to dig into how the program was crafted, and who may have improperly benefited from Grow NJ, released the first of its findings.
The report’s findings detail how businesses with ties to South Jersey political powerbroker George Norcross rigged the program to win as much as $500 million of tax breaks. The report also detailed glaring holes in the EDA’s oversight of Grow NJ, characterized as spotty at-best.