TECHNOLOGY TAX CERTIFICATE APPROVALS REINFORCE GOVERNOR’S ECONOMIC GROWTH STRATEGY
TRENTON, N.J. (Nov. 20, 2006)
– Reinforcing Gov. Jon S. Corzine’s Economic Growth Strategy to nurture the development of new technologies and ensure that the state continues to be a leader in innovation, the New Jersey Economic Development Authority (EDA) has approved 129 technology and biotechnology companies to share the $60 million allocation available in 2006 through the state’s creative Technology Business Tax Certificate Transfer Program.
The funding enables these technology and life sciences businesses to sell tax losses or research and development tax credits to raise cash to finance their growth and operations. It is administered by the EDA in conjunction with the New Jersey Commission on Science and Technology and the state Division of Taxation.
“The program is an important component of Gov. Corzine’s Economic Growth Strategy to assist growing technology and biotechnology companies and is a key element of our Edison Innovation Fund initiative,” said EDA Chief Executive Officer Caren S. Franzini. “This effective financing tool helps New Jersey companies continue their research, raise capital, and strengthen and build their business.”
This year’s allocations bring total funding under the tax certificate transfer program to $385 million since 1999, which has assisted more than 400 companies.
The Technology Business Tax Certificate Transfer Program enables eligible companies with fewer than 225 employees, at least 75 percent of whom must be based in New Jersey, to sell their net operating losses and/or research and development tax credits to profitable corporate entities, which also must be New Jersey-based. Proceeds from these sales must be reinvested in the seller’s business and can be used for business expenses like purchasing equipment or expanding facilities, or for working capital to cover operational expenses.
Tax Certificate Program Approvals
Earlier this year, the EDA authorized improvements to the program application process that clarify evaluation criteria, the definitions of a technology company and biotechnology company, and certain eligibility requirements. A modification was also approved to require each applicant to submit financial statements prepared by an independent accountant.
Applications are reviewed by the Division of Taxation to establish the value of the tax loss or tax credit benefit. The Commission on Science and Technology reviews the applications for technology qualifications. The EDA makes the final determination on eligibility. When an application is approved, a certificate is issued that identifies the value of the tax benefit being exchanged and transfers it from the selling to the buying company. Applications, which are due by June 30 each year, are available at www.njeda.gov.
The EDA is an independent, self-sustaining state financing and development agency that works to promote economic growth, job creation and the revitalization of New Jersey’s communities with financing assistance, technical support and entrepreneurial training, and real estate development activities.
Note to Editors: The list of approved sellers for 2006 follows.
Approved Tax Certificate Sellers 2006