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Deadline Approaching for State Tech Tax Program

Reminder: The application filing deadline for the Business Tax Certificate Transfer Program is 2 PM June 30, 2009. Please note that a non-refundable $2,500 application fee payable to the NJEDA is required. Please consult with a member of the EisnerAmper SALT Group if assistance is needed with preparing and filing the application.

The Technology Business Tax Certificate Transfer Program enables approved, unprofitable Technology and Biotechnology Businesses to sell their Unused Net Operating Loss Carryover (NOL) and Unused Research and Development Tax Credits (R&D Tax Credits) to unaffiliated, profitable corporate taxpayers in the State of New Jersey for at least 75% of the value of the tax benefits. This allows unprofitable Technology and Biotechnology Businesses to turn their tax losses and credits into cash to buy equipment or facilities, or for other Allowable Expenditures. The New Jersey Economic Development Authority (NJEDA) determines eligibility, the New Jersey Division of Taxation determines the value of the tax benefits (NOL's and R&D Tax Credits), and the New Jersey Commission on Science and Technology evaluates the technology and its viability.

The application and additional information is available at www.njeda.com

Eligibility
(Failing any one of the five criteria will result in ineligibility of any application to sell NEW or not previously approved NOLs and/or R&D Tax Credits):

No application shall be approved in which the new or expanding Technology or Biotechnology Business:  

  • has demonstrated positive net income in any of the two previous full years of ongoing operations as determined on its financial statements; Or,
  • has demonstrated a ratio in excess of 110% of operating revenues divided by operating expenses in any of the two previous full years of operations as determined on its financial statements; Or,
  • is directly or indirectly at least 50% owned or controlled by another corporation that has demonstrated positive net income in any of the two previous full years of ongoing operations as determined on its financial statements, Or, is part of a consolidated group of affiliated corporations, as filed for Federal income tax purposes, that in the aggregate has demonstrated positive net income in any of the two previous full years of ongoing operations as determined on its combined financial statements; Or,
  • has total U.S. employment (see Item 7 on Page 6 of the application for details) in excess of 224 employees, on a total corporate basis (including parent company, and all subsidiaries); Or,
  • Has fewer than 75% of total U.S. employment (see Item 7 on Page 6 of the application for details) in New Jersey.
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