New Jersey Assembly Bill A4916

New Jersey 2022-2023 Regular Session

• Introduced: 12/5/22
• Refer: 12/5/22

Caption

Amends "New Jersey Angel Investor Tax Credit Act" to provide additional tax credits for investments in high-growth businesses.

Impact

The introduction of this bill is expected to significantly impact New Jersey's economic landscape by encouraging investments in technology and innovation, particularly within underserved communities. By enhancing the tax advantages for investors, the state aims to stimulate economic growth and support businesses that often face challenges in securing funding. The bill also seeks to promote diversity in entrepreneurship by extending credits to minority and women-owned businesses, thereby aligning financial incentives with broader social goals.

Summary

Assembly Bill A4916 amends the 'New Jersey Angel Investor Tax Credit Act' to enhance tax incentives for investments in high-growth businesses. Specifically, the bill provides additional tax credits for qualified investments made by taxpayers in New Jersey’s emerging technology businesses. Under the amended legislation, investors could receive a tax credit of 20 percent against the gross income and corporation business tax for their qualified investments. Furthermore, an additional five percent credit is available if the investment is made in an emerging technology business located in an opportunity zone or is a minority or women-owned business.

Contention

Despite the bill's potential benefits, some stakeholders may raise concerns regarding the implementation and effectiveness of such tax incentives. Critics might question whether these additional credits will genuinely lead to increased investment in high-growth sectors or merely benefit existing businesses without fostering new job creation. Moreover, the cap on available tax credits at $35 million annually may also limit access for many potential investors, requiring careful management to ensure equitable distribution of resources among eligible companies, particularly in economically disadvantaged areas.