Application Now Open for Technology Business Tax Certificate Transfer Program
$60 Million Program Allows Eligible Companies to Sell Net Operating Losses for Capital
TRENTON (May 2, 2016) – Continuing its commitment to fostering innovation and growing the State’s technology ecosystem, the New Jersey Economic Development Authority (EDA) announced today that applications for the state’s Technology Business Tax Certificate Transfer (NOL) Program are now available online at https://www.njeda.gov/nol.
Administered by the EDA and the New Jersey Department of Treasury's Division of Taxation, the NOL program allows eligible technology and biotechnology companies to sell unused New Jersey net operating losses and research and development tax credits to unrelated profitable corporations.
“The ability to raise non-dilutive cash to finance growth and operations is critical to growing technology and biotechnology companies,” said EDA Chief Executive Officer Melissa Orsen. “We know that this program has served as a lifeline for many of the State’s growing businesses and we encourage every eligible company to take advantage of the funding available.”
Since the program’s inception in 1999, more than 500 technology and biotechnology companies have been approved for awards totaling more than $860 million. Last year, 41 companies were approved to share $47.4 million, with the average benefit totaling more than $1.1 million.
Agile Therapeutics CEO Alfred Altomari called the program vital to his company’s 2014 funding strategy, noting that the proceeds from the NOL Program, in combination with a bridge loan from existing investors, allowed it to fund operations during its IPO process.
Advaxis President and Chief Executive Officer Daniel J. O'Connor has said, “the non-dilutive capital we received from the NOL program has allowed Advaxis to continue our development efforts…the funding we have received gets put right back into our technology, helping to provide better medicines for patients in need.”
Gold Group Enterprises CEO Bob Gold shared that “the NOL funding, as well as the great programs and support we get from EDA, are, and will be, paramount to our success. The funding enables us to quicken the pace of our product enhancements and research and development by providing funding to expand our software development team.”
Unprofitable New Jersey-based technology or biotechnology companies with fewer than 225 U.S. employees (including parent company and all subsidiaries) must meet several requirements to be eligible for the NOL program. Requirements include (but are not limited to):
- The company must have pending or issued patents, copyrights, or exclusive licenses and must be able to show that this intellectual property is directly related to the core business;
- The company must have financial statements for the two most recent full years of operation compiled, reviewed or audited by an independent CPA firm;
- The company cannot have had positive net operating income on either of its last two full-year income statements according to generally accepted accounting principles. In addition, an eligible company cannot have a parent company with positive net operating income, or be part of a consolidated group of affiliates for federal income tax purposes with positive net operating income.
A complete list of requirements and program details can be found at https://www.njeda.gov/nol.
To be eligible to participate, companies must submit an application online to the EDA and file their corporate business tax returns with NJ Division of Taxation by June 30, 2016. Applicants should expect to hear by the end of August if their applications are being recommended for EDA Board approval.
Questions about the NOL program may be submitted to email@example.com. All responses will be posted on the EDA’s website.