EDA Opens 2017 Application for Technology Business Tax Certificate Transfer Program
$60 Million Program Allows Eligible Companies to Sell Net Operating Losses for Capital
TRENTON (May 1, 2017) – Providing the opportunity for early-stage companies to gain access to capital, the New Jersey Economic Development Authority (EDA) today announced that it is has begun accepting applications online for this year’s New Jersey Technology Business Tax Certificate Transfer (NOL) Program. Emerging technology and biotechnology companies interested in applying should visit https://www.njeda.gov/nol. Companies must apply online by June 30, 2017.
Administered by the EDA and the New Jersey Department of the Treasury's Division of Taxation, the NOL Program allows eligible technology and life sciences companies to sell unused New Jersey net operating losses and research and development tax credits to unrelated profitable corporations.
“Considered a lifeline by entrepreneurs around the State, no EDA program has been more highly-touted by the technology and biotechnology community than the NOL Program,” EDA Chief Executive Officer Melissa Orsen said. “The non-dilutive cash received through the program has helped hundreds of small businesses get through critical stages of development and ultimately flourish in the Garden State.”
To date, more than 500 companies have been approved for awards totaling over $905 million. Last year, 40 companies were approved to sell $35 million in benefits.
Holmdel-based Avlino, Inc., which offers solutions and services in analytics to help organizations use data more effectively, participated in the NOL Program for the first time in 2016.
“The NOL Program created an opportunity for Avlino to sell back its net-operating losses and R&D tax credits to profitable companies,” Avlino Founder, President, and Chief Executive Officer Ramana Jampala said, “Under this program, Avlino was able to reinvest those dollars back into product development and to augment our New Jersey based team.”
“It is perhaps the NOL Program that has been the most beneficial to both Svelte and Angel Medical, bringing in millions of dollars over a ten-year period that are non-dilutive to shareholders and help with financing new medical technologies to help people,” said Dr. Fischell.
Monmouth Junction-based biotechnology business CytoSorbents has turned to the NOL Program multiple times to raise much-needed capital as it commercializes its blood purification technology. Cytosorbents CEO Phillip Chan noted that funding from the NOL Program “will help CytoSorbents continue its international mission to help save the lives of critically-ill and cardiac surgery patients suffering from deadly inflammation.”
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 apply online by June 30, 2017. Also, in order to sell benefits generated in 2016, companies must file their corporate business tax returns with the NJ Division of Taxation by June 30, 2017. 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 firstname.lastname@example.org. All responses will be posted on the EDA’s website.
The EDA offers a multitude of resources to help technology and biotechnology companies grow and thrive in New Jersey. To learn about these resources, visit https://www.njeda.gov/tls and follow @NJEDATech on Twitter and LinkedIn.