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The basics:

• Murphy signs bills expanding support for NJ startups and innovation
• Angel Tax Credit and Evergreen Fund receive major updates
• New QSBS law creates capital gains exemption for small business stock
• Legislation aims to drive venture capital, high-quality job growth

A three-package bill signed into law by Gov. Phil Murphy aims at supporting New Jersey’s innovation economy.

The ratification took place June 30 during a torrent of activity in Trenton as the state budget process came down the stretch.

The measures include:

• Assembly Bill 5795/Senate Bill 4619: Modifies the New Jersey Innovation Evergreen Act to increase the maximum amount of the qualified investment. Also allows for a qualified investment to be a venture firm’s second or later investment into a business if it is larger than the first investment or occurs at a higher valuation than the first investment
• A2365/S3189: Increases the amount of the tax credit provided under the New Jersey Angel Investor Tax Credit Act. Additionally, allows the NJEDA to utilize unused credits from the annual allocation from the Technology Business Tax Certificate Transfer Program to support the award of tax credits under the New Jersey Angel Investor Tax Credit Act
• A4455/S4503: allows exemption from New Jersey gross income of certain capital gains from sale or exchange of qualified small business stock (QSBS) after Dec. 31, 2025

Strategic investments

Murphy pointed to strategic investments his administration has made to entrepreneurs to provide them with the tools and resources necessary to move their business forward.

“Over the course of our administration, we have firmly established New Jersey as a global leader in technology and innovation,” said Murphy. “Today’s bill signing underscores our commitment to aspiring entrepreneurs and innovative companies while driving our state’s economy forward.”

New Jersey Economic Development Authority CEO Tim Sullivan said that Evergreen Innovation Fund and Angel Tax Credit programs have become key tools for the NJEDA to help bolster early-stage innovation companies. And that it has resulted in greater investment into the life sciences, technology and clean energy sectors.

“The package of bills signed today will increase participation into the programs, unlock capital for entrepreneurs, and spur greater venture investment,” said Sullivan. “Additionally, the QSBS bill perfectly complements the suite of innovation programs built under the Murphy administration and will encourage entrepreneurs to continue building new businesses in New Jersey.

“Together, these bills will support new cutting-edge businesses, job creation, and a stronger innovation economy.”

Let’s hear it for the bill

Business groups applauded the bill package.

“Coinciding with the state budget, BioNJ commends the governor and Legislature for passing several pieces of legislation that will enhance New Jersey’s competitiveness and foster innovation-driven growth,” said Debbie Hart, president and CEO of BioNJ. “The expansion of the Angel Investor Tax Credit Program, along with novel policies to incentivize the development of manufacturing in New Jersey, including the Next New Jersey Manufacturing Program and New Jersey Innovation Evergreen Act – are prudent measures to support continued growth of our life sciences.”

“The Innovation Evergreen Fund and the Angel Tax Credit were great programs to support the entrepreneurial ecosystem in New Jersey, and I am very glad that the governor has taken to heart suggestions that will make them even better,” said Stephen Socolof, managing partner, Tech Council Ventures. “QSBS also aligns New Jersey with many other states as well as federal tax incentives for long-term business investment. Thanks to the governor for making these changes.”

“Ending our uncompetitive and outlier tax treatment of investments in innovative startups is one of the best ways to attract capital to grow jobs, our economy and our tax revenues,” said Christopher Emigholz, New Jersey Business & Industry Association (NJBIA) chief government affairs officer about the QSBS bills.

Offering support

Sen. Andrew Zwicker, D-16th District, is a prime sponsor of S4619 and S3189.

“These bills will support emerging businesses, attract private investment, and ensure that our economy benefits form the incredible talent and research institutions already based in our state,” said Zwicker. “By supporting fledgling startups and women- and minority-owned businesses through the use of tax credits and public matching funds, we will ensure they can grow and thrive in New Jersey.

“These changes will allow entrepreneurs to continue to innovate the next breakthrough technologies in our state, creating high-quality jobs and positioning New Jersey as the best place to start a business.”