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Life Science & Technology Tax Credit Programs
Research and Development Tax Credit A taxpayer that has performed qualified research activities in New Jersey may be eligible to claim the Research and Development Tax Credit. A credit for increased research activities is allowed based on qualified expenditures made in taxable years beginning on and after January 1, 1994. It provides a credit of 10% of the excess qualified research expenses over a base amount plus 10% of the basic research payments. Qualified research is limited to scientific experimentation or engineering activities designed to aid in the development of a new or improved product, process, technique, formula, invention, or computer software programs held for sale, lease, or license, or used by the taxpayer in a trade or business. To claim this credit, the taxpayer must complete Form 306 [pdf 100 k] and attach it to the tax return. Small NJ-Based High - Technology Business Investment Tax Credit A taxpayer may claim a tax credit in an amount equal to 10% of the qualified investment made by the taxpayer during the tax year in a small-New Jersey-based high-technology business. The maximum allowable credit for each tax year is $500,000 for each qualified investment made by the taxpayer. The small high-technology business must employ fewer than 225 employees, of which 75% must have jobs in New Jersey. The small high-technology business must conduct pilot scale manufacturing or qualified research in New Jersey in the fields of advanced computing, advanced materials, biotechnology, electronic device technology, environmental technology, and medical device technology. To claim this credit, the taxpayer must complete Form 308 [pdf 83 k] and attach it to the tax return. Technology Business Tax Transfer Program in Technology This program allows unprofitable technology and biotechnology companies to raise cash by selling New Jersey Net Operating Losses and Research and Development tax credits to other unaffiliated New Jersey businesses for at least 75 percent of their value. The $60 million available annually through the program is open to expanding companies with less than 225 employees that have at least 75 percent of their workforce in New Jersey. Additionally, the company must have intellectual property. The cash benefit to the company may be used for general growth capital. The Company must commit to remain in NJ for the upcoming year.
For more information, call the New Jersey Economic Development Authority at (609) 777-4898.
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